Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI



South Africa: now making, assembling 50% of taxis


19 March 2013

South Africa has made significant progress in localizing the manufacture and assembly of minibus taxis, Economic Development Minister Ebrahim Patel said on the weekend.

“Some 12 months ago, none of the taxis on our roads were assembled in South Africa. Today about 50 percent of all taxis that are purchased are made or assembled here in South Africa, and we’re moving towards the target of localizing two-thirds of assembly in the taxi industry by 2015.”

The government is leading a campaign to promote the local procurement of supplies across all industries in order to boost the economy’s capacity to create jobs.

Patel said the Industrial Development Corporation (IDC) had been mandated to develop a national localization strategy to guide all spheres of government.

He said the labour-absorbing capacity of local manufacturing industries had to be boosted to stimulate job creation and economic growth, adding that a strong local manufacturing sector would have a positive impact on South Africa’s balance of payments.

“We are working in partnership with a major manufacturer, Toyota, who has expanded the factory in eThekwini, as well as a partnership with the IDC and a Chinese manufacturer called the Beijing Automotive Works that has started a factory in Gauteng.

These companies had already employed 220 people to assemble taxis locally, with the number set to increase significantly by 2015, Patel said.

In October 2011, the government, business, labour and community-based organisations signed a Local Procurement Accord committing the parties to work together to increase local procurement as part of South Africa’s plans to create five- million jobs over the next decade.

And in December, the government put the buying power of the state firmly behind local manufacturers, with new amendments to the the Preferential Procurement Policy Framework Act allowing the government to name sectors and products that require a minimum level of local content to qualify for state procurement.

Bus manufacturing was among the first batch of sectors designated for local procurement under the amended law, resulting in the local sourcing of 80 percent of all inputs and supplies in the manufacturing of bus bodies for the rapid public transport systems in Pretoria, Cape Town and Johannesburg.

Other products designated in the first batch included power pylons, rolling stock, TV set-top boxes, clothing, canned vegetables, footwear and leather products.

In January, the Department of Trade and Industry announced a second batch of designated products, namely electrical valves, manual and pneumatic actuators, electrical and telecommunication cables, and components of solar water heaters.

S.Africa okays $5.4 bln in clean energy projects

Reuters Africa

October 29, 2012

JOHANNESBURG (Reuters) – South Africa has given the green light to an initial $5.4 billion worth of clean energy projects that will allow it to procure 1,400 MW of electricity and help reduce reliance on coal-fired plants, the energy minister said on Monday.

The government has selected 28 wind and solar projects in the first stage of the programme, with the contracts expected to be signed on November 5, Energy Minister Dipuo Peters said.

“These bidders will be investing about 47 billion rand in power generation and will create a number of jobs during construction and operation of these power plants,” Peters said in a statement. The plants are due to be operational between 2014 and 2016.

Africa‘s largest economy depends on coal for 85 percent of its electricity supply of around 41,000 MW. Last year it launched a process to procure cleaner energy to reduce carbon emissions and bolster electricity supply.

A key producer of platinum, gold, iron ore and coal, South Africa has been struggling to meet fast-rising demand for power.

The process of adding more renewable power to the grid has dragged on for years and raised doubts about the government’s ability to deliver on its plans.

It has also chosen another 19 renewable energy projects worth 1,043.9 MW in the second stage of the programme, which it hopes to finalise by late March next year. A third bidding round will close on May 7.

South Africa wants to use the green energy drive to boost job creation through manufacturing and requiring energy companies to source materials locally.

While the original procurement plan was to eventually add up to 3,725 MW of green energy to the national grid by 2016, the programme has recently been expanded to source an additional 3,200 MW of renewable power by 2020.

Apart from green energy, South Africa plans to procure more than 9,000 MW of new electricity produced from coal, gas, regional hydro and co-generation at industrial plants by 2025. Other plans include a tender for 9,600 MW worth of nuclear power.

© Thomson Reuters 2012 All rights reserved

Ashley Murray, Wastewater Engineer

“I don’t think of waste as something to get rid of, but as a resource with real economic value. Profits made from reusing waste could transform sanitation and health around the world.”

At any moment, half of the world’s hospital beds are filled with people suffering from water-related diseases. Each year, two million of them will die. Why? Every morning, more than 2.5 billion wake up with no access to basic sanitation.

Ashley Murray is working to revolutionize the way the world thinks about waste, but rather than pointing to public health or the environment, she’s motivating governments and the sanitation sector with a persuasive new argument: dollars and cents.

It’s not that she’s insensitive to people and the planet. She makes her home in urban Ghana where, as she describes, “Any surface water is an open sewage stream. It’s hard to overstate the enormous health and environmental impacts of inadequate sanitation.” Her unique solution is not to get rid of wastewater and fecal sludge, but to value them… Read more.

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.

Mythbusting 101

How government-industry collaboration enhances contracting

February 17, 2011 Marvin Center

George Mason University, Washington D.C

Conference website

ICT Growth for Business in Africa

ICTs are certainly going to transform public sector management in Africa.

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