Search

Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI

Category

Foreign aid

EU donors freeze aid to Uganda over corruption


Bloomberg News

KAMPALA, Uganda (AP) — More Western donors are freezing aid to Uganda after a scam in which up to $13 million in donor money was embezzled in the office of Uganda’s prime minister. The aid freeze is the kind of action long demanded by transparency campaigners who charge that the money oils a corrupt system.

Uganda has a reputation as a corrupt country, but the latest scandal — brought to light by the country’s auditor general in October — is remarkable for its details: More than $220,000 was spent on gas in four days, millions of dollars were diverted to buy luxury vehicles for top officials, and millions were deposited into individuals’ private accounts.

Because the money was for the rehabilitation of parts of northern Uganda devastated by decades of warlord Joseph Kony‘s brutal insurgency, the scandal has provoked a lasting rage around the country and inspired aid cuts that foreign donors had been reluctant to inflict on this East African country.

Roberto Ridolfi, the head of the European Union delegation to Uganda, said in a statement late Tuesday that the scandal and those before it amounted to “a breach of trust” on the part of Ugandan authorities. Sweden, Germany, Ireland, Britain and Denmark have already cut or cancelled all aid to Uganda over the scam, saying they have lost faith in the government’s capacity to spend money responsibly.

Western donors fund up to 25 percent of Uganda’s budget.

Ridolfi said the EU and its development partners in Uganda “will withhold pending budget support disbursements and any further commitments for an initial period of up to (six) months.”

The donors are giving Uganda until April to pay back all the lost money, investigate the scandal, and take action against all the suspects. But investigations of this nature, when they happen, rarely produce the intended results in Uganda, where corruption charges are often politicized and then dismissed. This year three ministers with close ties to President Yoweri Museveni who faced corruption charges were set free by a judge who said they were scapegoats. The three politicians swiftly returned to their jobs […]

Some campaigners who had long urged donors to act tougher against official waste and graft say the audacity of the latest scandal vindicates their calls for the dismantling of an often-comfortable relationship between the state and its donors. They want foreign aid to be channeled through non-state actors engaged in service delivery and for donors to work directly with contractors in cases where the authorities cannot be trusted with cash.

“For the first time the donors are coming out and putting clear benchmarks and I think it’s a good move,” said Cissy Kagaba of the Anti-Corruption Coalition of Uganda, a watchdog group. “But there are other alternatives they can use to ensure that the money reaches the intended beneficiaries.” Read the full article here.

Senegal’s reforms and red carpets


Africa Report

November 27, 2012

Senegal’s President Macky Sall has slashed government spending to finance new infrastructure projects.

Faced with an audit of Wade-era projects, the opposition says he is playing political games. Dakar has been rolling out the red carpet in recent weeks.

Elected in March on a reform ticket, President Macky Sall is in demand as an interlocutor – whether it is by the World Bank, the UN or France’s President François Hollande, who stopped in Dakar on 12 October en route to his more controversial landing in Kinshasa for the Francophonie summit.

This month, the Mo Ibrahim Foundation is holding its annual development conference in Dakar to salute Senegal’s political achievements.

Dakar’s National Assembly gave Hollande the chance to set out his Africa policy, which he insisted was non-interventionist and non-paternalistic.

Hollande seized the chance for a tête à tête with Sall, seeking his help for the regional effort to tackle the worsening in- security in Mali.

Senegal’s troops, alongside Ghana’s, are regarded as the most professional in the region.

But Sall has plenty of local problems to tackle – such as the perennial rainy-season flooding.

The government’s failure to invest in flood defences was one of the reasons for voters turning against former President Abdoulaye Wade.

In September, Macky Sall pushed through a bill to abolish the Senate, the second chamber in the National Assembly.

He promised that the 767bn CFA francs ($1.5bn) would be used to finance a 10-year plan for effective flood defences, storm drainage and sanitation.

Opponents to Sall’s plan accuse him of partisan plotting.

The Senate was dominated by members of Wade’s [I]Parti Démocratique Sénégalais[/I].

But Sall’s supporters insist the plan reflects the need to cut ballooning government overheads inherited from the Wade era.

The Sall government aims to cut the budget deficit from current levels of 7.4% of gross domestic product down to 4% by 2015.

So far, Sall has closed 59 moribund state institutions, banned first-class travel for civil servants and is selling a presidential jet.

To promote accountability, Sall has published details of all official salaries, declared his own assets and promised to cut salaries at state-run companies to below 5m CFA francs per month.

“Humility, sobriety and rigour should govern our politics,” Sall told The Africa Report’s sister magazine Jeune Afrique after his election.

“I assure you that there will be a profound break from the practices that were in force under my predecessor.”

The new government has quickly launched audits of government departments and projects for evidence of illicit disbursements.

This includes projects run by Wade’s son Karim, such as the 650bn CFA franc energy crisis programme, Plan Takkal.

Britain, France and the United States have pledged cooperation in tracking down stolen money.

Sall rejects claims of political vindictiveness: “The only thing that interests us is that the errors of the past don’t repeat themselves,” he said.

The courts will take cases identified by the audit.

His promise to cut the presidential term from seven to five years with immediate effect won local and international plaudits, as did his agreement with the African Union to set up a special tribunal for Chad’s ex-leader Hissène Habré, in exile in Senegal since 1990.

Ethiopia: Is ECX at it again? ECX’s upcoming procurement bid


Nazret.com November 29, 2012


By Wondwossen Mezlekia, 

The Ethiopia Commodity Exchange (ECX) is currently conducting a high-ticket international procurement – the first of its kind since a multi-million dollar bid was busted in 2010 due to alleged fraud and corruption during the bidding process.

The bid for the supply, installation, and maintenance of a futures trading software that ECX floated back in 2010 was marred by dishonest maneuvering, seemingly to favor the Sri Lanka based company, Millennium IT, and World Bank withdrew ECX’s award proposal and cancelled the loan. The loan was part of what the government had borrowed from International Development Association (IDA) for the purposes of financing the Rural Capacity Building project. [1] Strangely, the said futures trading software was not needed to begin with and would have been running idle today had ECX purchased it in 2010, because the government is, as it has always been, decidedly against price speculations and hence would not allow Forwards and Futures trade operations that the software was supposed to support.

ECX is once again preparing to spend some of the money that the government has borrowed from the Investment Climate Facilities for Africa Trust (ICF) and other donors on an online trading platform at an estimated total cost of more than $10 million (exact amount and details are withheld). Arguably, much like the futures trading software, the merit of this investment is also questionable, especially in light of ECX’s and the government’s current priorities, the details of which is for another article. The purpose of this article is to equip concerned citizens with the information and resources they need to be on their guard against corruption, and to put on notice anyone who may be under temptation or illusion to fraudulently benefit from the upcoming bid. Although there is no evidence so far, it is better to prevent corruption than to prosecute it.

According to ECX’s budget proposal that was reviewed for this article, almost 76% of the budget for the online trading project will be covered by funds from the World Bank’s Rural Capacity Building Project. ICF has agreed to cover the financing gap of about 24% of the total estimated budget through a grant. The procurement is being conducted under the auspices of the outgoing officers, Dr. Eleni Gebre-Medhin, Solomon Edossa, and Ahadu Woubshet who only have an advisory role under a one-year contract, even though the new CEO, Anteneh Assefa and other officers have already assumed their positions.

The Invitation for Bid (IFD) for the procurement of a core system for online trading, including its risk management, surveillance, and clearing components (Procurement Reference Number ECX-ICF/G/002/2012) was advertised on November 1, 2012 on national papers and online, including on dgMarket. [2] Accordingly, the bid will be opened in two phases: the technical bid will be opened on November 30, 2012 at 10:30 am local time at ECX Media Room, and the opening date for the financial bid will be announced thereafter.[3] The bidding will be conducted in accordance with the open International Tendering Procedures contained in the public procurement guidelines of the Government of Ethiopia, the ICF Guidelines[4], and the International Competitive Bidding (ICB) procedures.

The past record of the government in detecting or prosecuting suspected fraud and corruption is dismal. On the other hand, donor’s guidelines have proved to be reliable sources of defense in past disputes involving international procurement bids. Among these, ICF’s guidelines appear to be by far clearer and strictly dictating how the borrower and bidders alike should behave during the bidding process. For example, ICF not only offers to provide assistance of audit services and monitoring (Article 1.6), but also explicitly states the steps that it takes to fight fraud and corruption (Article 1.7).

Review, Assistance, and Monitoring

1.6 ICF and auditors appointed by ICF shall review the Grant Recipient’s selection process for the selection of suppliers proposed by the Grant Recipient in the Procurement Plan to ensure compliance with the Grant Agreement and these Guidelines. The Grant Recipient shall retain all documentation with respect to each contract during project implementation and up to two [y]ears after the closing date of the Grant Agreement. This documentation would include, but not be limited to, the signed original of the contract, the analysis of the respective proposals, and recommendations for award the record of justification, the capabilities and experience of the suppliers, for examination by ICF, auditors appointed by ICF or by its suppliers.

Fraud and Corruption

1.7 It is ICF’s policy to require that Grant Recipients, as well as suppliers and their subcontractors under ICF-financed contracts, observe the highest standard of ethics during the selection and execution of such contracts. In pursuance of this policy, ICF will reject a proposal for award, cancel the portion of the Grant allocated to a contract; sanction a supplier if it at any time determines that the tender process was marred by corrupt, fraudulent, collusive, coercive, or obstructive practices. In addition, ICF will have the right to require that, in contracts financed by an ICF grant. a provision is included requiring suppliers to permit ICF to inspect their accounts and records and other documents relating to the submission of proposals and contract performance and to have them audited

Articles 2.1, 2.15, and 2.21 of ICF’s guidelines also require borrowers to conduct bidding by following a two-tiered approach and based on Quality and Cost Based Selection (QCBS), which uses a competitive process that takes into account the quality and the cost of the services in the selection of the winner. The guidelines prohibit evaluators of technical proposals from having access to the financial proposals until the technical evaluation is concluded.

The Selection Process

2.1 QCBS uses a competitive process among short-listed firms that takes into account the quality and the cost of the goods and supplies in the selection of the successful supplier. Cost as a factor of selection shall be used judiciously. The relative weight to be given to the quality and cost shall he determined for each case depending on the nature of the assignment.

Evaluation of Proposals: Consideration of Quality and Cost

2.15 The evaluation of the proposals shall be carried out in two stages: first the quality, and then the cost. Evaluators of technical proposals shall not have access to the financial proposals until the technical evaluation is concluded. Financial proposals shall be opened only thereafter. The evaluation shall be carried out in full conformity with the provisions of the RFP.

Articles 2.11 and 2.12 if IFC’s guidelines even go as far as to dictating the minimum time that grant recipients need to allow between the different stages of the procurement process. For example, the minimum time-limit for receipt of proposals should not be less than 40 days from the date of the advertisement, except in emergency situations.

While these and other Articles of ICF’s guidelines appear to provide reasonable controls around each segment of the procurement processes, any control is only as strong as the people applying them. It is thus imperative that concerned citizens and bidders get engaged and attentively monitor all international bidding processes conducted at ECX and other institutions in order to prevent misappropriations of foreign aid in Ethiopia.

Report suspected fraud and corruption to Investment Climate Facility for Africa at info@icfafrica.org or projects@icfafrica.org; the World Bank Group’s Integrity Vice Presidency at investigations_hotline@worldbank.org; or Transparency International at transparency@transparency-usa.org.

[1] http://poorfarmer.blogspot.com/2012/03/is-government-serious-about-fighting_19.html
[2] http://www.dgmarket.com/tenders/np-notice.do~8547811 (dgMarket is an international portal for tenders and procurement opportunities from governments and international organizations)
[3] The time elapsed between the date of advertisement and the bid opening date appears to be shorter than the minimum time limit set under Articles 2.11 and 2.12 of ICF’s Procurement Guidelines
[4] http://www.icfafrica.org/documents/ICF-Procurement-Guidelines-for-Goods–Suppliers.pdf

Read more about ECX at http://poorfarmer.blogspot.com/p/ecx-watch.html
Contact the writer at poorfarmer@gmail.com

Britain and Ireland Suspend Aid to Uganda after Millions Go Missing


Voice of America

by Douglas Mpuga

October 31, 2012

Britain has joined Ireland in suspending aid to Uganda’s office of the prime minister.  The move comes after a draft report by Ugandan’s auditor-general found that over $15 million [€12 million]  in aid had been transferred to unauthorized accounts in the office of the Ugandan prime minister.The money was meant to have been spent on helping the needy, and to help pay for a ‘peace recovery and development program’ in northern Uganda after decades of conflict and devastation.The Ugandan governmenthas pledged prosecutions. Two senior officials have been charged, while 17 others have been suspended as the investigation continues.“This report does not surprise anybody,” said Dr. Fredrick Golooba Mutebi, a political analyst and a visiting fellow at the University of Manchester in the United Kingdom. The only shock, he added, “is the amounts of money stolen are quite colossal.”He exonerated Uganda’s Prime Minister, Amama Mbabazi, saying he has just been appointed to the office and that the theft has been going on for a long time. “The only way you can hold him responsible is that he has been Secretary General for the ruling party for a long time. So you can hold the ruling party responsible, in which case he is culpable.”

Mr. Mbabazi has reportedly publicly apologized to Ireland, saying no money was ever paid to him, and that he never handles the aid money.

He said that although the missing money was discovered in private bank accounts, not all of it was ‘misappropriated,’ but ‘merely irregularly managed,’ according to local media reports.

“I think the government is half-hearted about fighting corruption,’’ said Mutebi. He said the government is able to wage such a fight, but it may not be in its best interest to prosecute senior officials accused of  corruption.

He noted that if the politically influential can behave with impunity, then it’s seen as hypocrtical to pursue ordinary members of the public.

The government, he said, is also constrained by the fact that some of its most senior officials are as corrupt as the people who stole money from the prime minister’s office.

Mutebi described the level of impunity in the country. “Impunity in Uganda is not only in connection with corruption, but in connection with various other misdeeds by government officials, and people connected to the ruling party.”

But Mutebi said the donors can do something about the theft of donor funds. “They [donors] could decide to withhold general budget support and go for project funding – where they have a much closer watch over the money.”

“But as long as they [donors] put the money in the government’s kitty, it is really beyond them to control what the government does with it.”

The donors, he explained, could withhold the aid. Donors could claim that if they do that it could be punitive to poor people, but there is no empirical evidence for that.

“If large amounts of donor money are being stolen, in what sense are they going toward funding things that are important to poor people?” he wondered.

 

Band aid:Why has Africa had such a small role in the famine relief effort?


Michael Hofman

August 24th, 2011 – Prospect Issue 186 FREE.

Dadaab in northeast Kenya is one of the largest refugee camps in the world

 

 

 

 

 

 

 

 

 

 

 

 

 

Our hearts demand a generous response to the Horn of Africa famine. Our heads should now ask some tough questions. The UN general assembly, convening on 20th September, should be the venue for frank answers.

For all the calls from international aid donors for African “ownership” of policies involving the continent, for all their pledges to ensure a role for “stakeholders,” for all their advocacy of “community participation,” one thing stands out. Aid agencies have assumed leadership of the famine relief effort in east Africa, and have taken decisions that will impact the region for years to come. Far from providing a hand on the policy tiller, and a voice at the planning table, Africa has sat back, watching from the sidelines the biggest relief operation on the continent since the Ethiopian famine of 1984.

Of course, operating in such a tough neighbourhood is a huge challenge. The drought embraces some of Africa’s most troubled states: Eritrea and Ethiopia are bitter enemies; Sudan is a pariah; the newly-independent South Sudan is a fledgling in world affairs; Somalia, the worst afflicted by famine, has no government; Kenya, where up to 3m are at risk, is a byword for corruption.

But this does not justify Africa’s absence from the operations room. Nor does it explain why a president or senior minister from one of the afflicted states, or a former leader, or at least a top official from the African Union, has not been chosen by peers to take responsibility for coordinating donor assistance and recipient needs.

Instead, Africa has twiddled its thumbs, postponing by a fortnight an African Union “emergency” summit, scheduled to be held on 9th August. Meanwhile, there has been no one to field some awkward questions.

Many lives have been saved by international intervention, but many have been lost by a late response to an obvious crisis; and many more will be affected by decisions made by aid donors after inadequate consultation. Why was the official announcement of the famine, and the appeal for help, made so late in the day? Children were dying of hunger in northeast Kenya weeks earlier: a fact underplayed at the time by elements of the Kenyan media. Who decided when to declare that the famine was leading to a catastrophe? Were African governments involved in the announcement? If not, why not?

It is unclear who is in charge of relief strategy in the Horn; who takes responsibility for decisions such as endorsing the role of Dadaab, the settlement in north east Kenya, as a centre for relief operations and home to hundreds of thousands of Somalis, fleeing the drought. With a population of over 400,000, Dadaab is one of Kenya’s largest “cities.” But catching up fast will be a second such camp: the result of pressure on a reluctant Kenyan government, despite the fact that the country’s weak coalition doesn’t have the governance and security capacity to absorb a huge flow of refugees to another site.

Africa’s economic recovery has gathered pace in recent years, changing many countries dramatically. But decades of decline have left a grim legacy. In far too many places, the state is weak; its capacity to initiate change has shrunk. The reluctance or inability of African governments to play a part in the response to the famine marks yet another step in their surrender of authority and abnegation of responsibility—and the beneficiaries are the very organisations that play such a big role in disaster relief: non-governmental organisations (NGOs).

The power and influence of NGOs has grown dramatically since African independence 50 years ago. From a few thousand in the 1960s, controlling funds measured in the millions, there are now over 50,000 NGOs operating in South Africa alone.

Although the NGO record on development is mixed at best, the number of NGOs granted consultative status by the Economic and Social Council—the central UN forum for formulating policy on social and economic issues—has risen from 41 in 1948 to over 1,350 in 2008.

As their numbers have grown, they have helped to undermine what the character named Oldest Member, a crusty retired district officer who lives in Kenya and features in my latest novel, Dizzy Worms, identifies as the social contract. In the novel, he asks himself: “What if the government doesn’t deliver? What if the chaps in the north east come to realise that although there is a ‘food deficit’ every year, they won’t starve?… Why? Cos WorldFeed and Oxfam and their UN chums will chip in. All managed by foreigners. Tens of thousands of the buggers come out each year, catching the gravy train that chuffs its way around Africa… If you are starving, the UN will feed you; if the mozzies are killing your kids, Bill Gates will provide a mosquito net; if your road needs rebuilding, DanAid will help… So if the state can’t deliver, why be loyal? Why pay your taxes? Instead you look to big-man politics—to your relative, to your clan, to the ethnic leaders, or the regional boss.”

In other words, a vicious cycle has been created. As the state surrenders many of its core responsibilities to aid agencies, its capacity to manage deteriorates. In the process, it loses some of the country’s brightest and best to the NGOs and UN agencies, who offer salaries that local employers cannot match.

Soon the aid caravan will move on, leaving the two biggest questions unanswered: where has Africa been during the crisis? And why have international aid donors not raised this question themselves? Generosity without accountability is no way to respond to Africa’s gravest famine for 25 years.

Cameroon: Public contracts – between good intentions and corrupt practices


Corruption Starts Here.
Image by IntangibleArts via Flickr

In the Shadow of Transparency…

Cameroonian parliament officials met at the beginning of last month to discuss better ways of managing public contracts. This important meeting  was one of the many activities that commemorated  the tenth anniversary of the creation of Agence de Régulation des Marchés Publics, the public contract regulatory board. However, according to this article published in the official newspaper, corruption, not the aging regulatory board, seems to have  ownership and control over the procurement processes in Cameroon.

Most analysts agree that high corruption is correlated with delayed development and economic inequality  within countries. In 2010 the World Bank reported that  “quiet corruption,” involving small amount of money and influence, also had a destructive effect on African development.  This finding corroborated Transparency International/CRETES corruption survey conducted in 2007 which showed that respondents identified corruption in public contracts as the most widespread in Cameroon. A breakdown of corruption by industry type demonstrated that most bribes came from the construction and public works sectors (100%), health and social welfare sectors (50%), and they were all given to “facilitate administrative procedures” in Cameroon.

What is fascinating about this article is the paradoxical attitude of the international community and donors toward Cameroon. Instead of blame, the ‘formidable’ Cameroonian procurement system continues to receive praises from donors, the author writes.

If any, the praises of the ‘donors’ should be understood as devices that primarily seek to incentivize good governance and trade, not corruption. The WTO plurilateral agreement on government procurement (GPA) is the only legally binding agreement that promotes procurement reform and the fight against corruption. A country only needs to establish basic procurement transparency requirements domestically to become an observer to the GPA agreement. To date, however, no African country is party to the GPA agreement. Nevertheless, since 2001 Cameroon became and remains the first and lone  African observer to the GPA agreement.

The ‘ambivalence’ of the international community toward Cameroon highlights strategic challenges that proponents of government procurement reform face in developing countries. That is, in attempting to promote a market-based approach to government contracting, international reform regimes are  compelled to separate the essential from the nonessential. In the shadow of transparency where corruption already exists, where official signatures cannot be trusted, where the procuring administration cannot detect a priori falsified bidding documents, blame or praise alone is a limited solution. However, as the climate of government procurement continues to change toward reform, transparency and open competition worldwide, national systems that remain noncompetitive  may continue to do so, but only at their political economic and institutional peril.

So far we know that corruption is rampant in the public sector in Cameroon. To fight corruption and get value for money spent, the government of Cameroon may benefit  from research that determines which  parts of its procurement  architecture are more amendable to change in the short run and from adopting result-oriented  policy models for long -term strategies. Additionally, a more proactive stand  could take advantage of cutting-edge practices in  technical reorganization of the public procurement chain, technological innovation in the public sector, and the participation of civil society in the negotiation process of public contracts. S.N. Nyeck

Cameroon Tribune February 27, 2011

George Mbella

The development of Cameroon largely depends on the effectiveness and efficiency of its public procurement and contract award procedures. The system involves several actors in the public and private sectors, controlled by the Public Contracts Regulatory Board, ARMP under the supervision of the Presidency of the Republic and the Prime Minister’s Office. The gap between amounts disbursed for development and the actual implementation of projects is widening due to widespread corruption that costs FCFA billions each year to the state.

Such was the context of the round table conference that closed the week-long celebrations marking ARMP’s tenth anniversary last Friday, February 25 in Yaounde under the theme “Together, let us fight corruption in public contracts“. Presenting the reports of the three workshops that earlier held on the 22, 23 and 24 of February involving more than 472 participants drawn from all levels of the public procurement system and split in three groups, Ondoa Atanga Roger, Inspector General at ARMP, disclosed the results of a study carried out by ARMP in 2006 on the phenomenon of corruption in public contracts in Cameroon.

The study carried out by ARMP in 2006 identified 166 cases of malpractices in public contracts; most of which originate from corruption,” said Ondoa Atanga Roger. The study, he further said, revealed all actors such as project owners, contracting authorities, members of public contract award commissions, specialised services of the Ministry of Finance, banks, ARMP services, independent observers, bidding companies and contractors, among others were involved in promoting corruption at the levels of preparation, award, implementation, monitoring and hand-over of public contracts.

During the award phase, for example, project owners disrespect the set deadlines for awarding contracts and proceed often to emergency procedures such as mutually-agreed contracts after colluding with bidders to over-bill. These same project owners sometimes refuse to sanction bidders with falsified documents or erroneous information often issued by so-called credible banks or social security institutions. Furthermore, contracting companies from the private sector stop at nothing to corrupt officials involved in the public contracts system and even controlling experts and independent observers who append their signatures signifying the hand-over of fictitious or poorly implemented projects. In spite of a formidable public procurement system praised by donors, the study noted the poor application of rules resulted from factors such as ignorance of rules governing public contracts, the complexity of procedures, the incompetence of actors, absence of standardisation of documents, influence peddling, generalised impunity or high tolerance for corruption and the timid application of sanctions.

The workshops, Ondoa Atanga Roger concluded, provided opportunities for actors to contribute in a participatory manner in the elaboration of NACC’s national strategy for the fight against corruption in public contracts focused on prevention, education, improvement of working conditions, incentives to actors and sanctions on recalcitrant actors. While clamouring for the protection of whistleblowers and a halt to impunity, among other solutions, the participants resolved to form a coalition to eradicate corruption in the public contracts system.


Africa yearbook


The publication is freely available  until February 28, 2011.

Blog at WordPress.com.

Up ↑

%d bloggers like this: