Search

Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI

Category

Legislative

Rwanda: Latest – Minecofin PS Appears in Parliament Over Draft Procurement Law


The New Times (Kigali)  via AllAfrica
January 19, 2015

 

Professional procurement officers in the public and private sector will add value to Rwanda’s procurement sector, Kampeta Sayinzoga, the Permanent Secretary in the Ministry of Finance, told The New Times.

She was appearing before the Parliamentary Standing Committee on Budget and Patrimony to defend a draft law that seeks to professionalize procurement this morning.

“The added value of this [new] law is that, it actually brings standards and professionalism in the procurement sector for both public and private circles,” said Kampeta.

Once enacted, the law is expected to close the loopholes that have been prevalent in public procurement sector where, according to the Auditor-General, about thirty percent of tenders awarded by public entities do not comply with procurement guidelines.

The new law will strengthen the existing legislative framework that governs public procurement by streamlining all the institutional and legal frameworks governing procurement management.

According to the Auditor General’s report covering the period between August 2012 and June 2013, more than Rwf23 billion was lost in poor contract management procedures, while nine contracts, worth Rwf908 million, were abandoned by contractors.

In a recent interview with The New Times, Augustus Seminega, the Director General of Rwanda Public Procurement Authority, blamed procurement errors on low skill levels, lack of experience and laxity among procurement officers.

Article 2 of the new draft law say that the profession of procurement shall be entrusted with persons who have knowledge, governed by ethical rules and international best practices and those who have chosen to practice it under supervision of a professional body in charge of establishing a code of professional practice.

South Africa: Mbeki, Manuel to give evidence in arms probe


The Citizen

July 16th, SAPA

Former president Thabo Mbeki will testify as a witness in the first phase of the Arms Procurement Commission, it was announced.

The commission, which is probing the R70 billion arms procurement deal, will hold public hearings from August 5 until January 31, subject to President Jacob Zuma granting an extension beyond November, spokesman William Baloyi said in a statement on Monday.

Mbeki and Minister in the Presidency Trevor Manuel were set to testify in the second half of January.

Baloyi said the first phase of the commission would “deal with the rationale for the Strategic Defence Procurement Package”, and whether the arms and equipment acquired were under-utilised or not utilised at all.

The first witnesses would be navy and air force officials. Armscor witnesses would be named later.

Former Intelligence Minister Ronnie Kasrils and Congress of the People president Mosiuoa Lekota would be called as witnesses between September 30 and October 4, followed by department of trade and industry officials until November 11.

Former Public Enterprises Minister Alec Erwin was expected to testify for three days in November, followed by National Treasury officials until the end of that month.

“It is also important to note that the programme is not cast in stone and circumstances prevailing at the hearings may require that it be adapted or altered, and this may also effect the sequence of witnesses,” Baloyi said.

“Some of the witnesses may be recalled at a later stage, when the commission deals with the terms of reference relating to allegations of impropriety, fraud and corruption in the acquisition process, a phase in which the ‘whistleblowers’ and those who are implicated will feature.”

The commission would be held in the council chambers of the Sammy Marks Conference Centre in Pretoria.

The deal, which was initially estimated to cost R43 million, has dogged South Africa’s politics since it was signed in 1999, after then Pan Africanist Congress MP Patricia de Lille raised allegations of corruption in Parliament.

Zuma himself was once charged with corruption after his financial adviser Schabir Shaik, who had a tender to supply part of the requirements, was found to have facilitated a bribe for him from a French arms company.

The charges against Zuma were later dropped.

Analysis: New law fails to ease oil concerns in Uganda


IRIN NEWS

KAMPALA/NAIROBI, 13 December 2012 (IRIN) – Uganda’s parliament recently passed a law to govern the exploration, development and production of the country’s estimated three billion barrels of oil, a resource whose extraction will directly affect the livelihoods of tens of thousands of people.

While the law streamlines the burgeoning industry, analysts have raised concerns over transparency and over who controls the sector.

“The new law helps set clear guidelines under which the oil sector is to be run and managed, and makes clear who is in charge of what roles,” said Tony Otoa, director of Great Lakes Public Affairs (GLPA), a Uganda-based think tank focusing on oil and governance. “However, there are some concerns about transparency and too much power within the oil industry in the hands of the president.”

The bill was passed on 7 December after weeks of wrangling over its controversial Clause 9, which gives the energy minister wide-ranging powers, including authority over the granting and revoking of oil licenses, negotiating and endorsing petroleum agreements, and promoting and sustaining transparency in the petroleum sector. Many members of parliament (MPs) felt these powers should be held by an independent national oil authority.

“Essentially, the standoff, which has ended, was about the withdrawal of trust from a government that is battered by corruption scandals. Also the way the cabinet operates is that, in the past, the feeling has been that some key ministries, like finance, are effectively run by the presidency after being stuffed by yes-men or -women. The pushback against Clause 9 also comes as the Central Bank opened its vaults to a large withdrawal in 2010 [US$740 million to buy six fighter jets] only for approvals to be sought retrospectively,” said Angelo Izama, a Ugandan journalist and oil sector analyst.

“Loss of trust”

“This loss of trust is behind the resistance to greater control by the executive,” he added. “The executive has not been a bad shepherd of the process so far. Uganda’s negotiating position has been tougher with the oil companies, ironically, without the oversight of parliament. However, public scandals elsewhere have negatively affected the ability of the president to convince lawmakers – especially of his party – that he means well.”

A number of donors – including the UK and Ireland – recently suspended aid to Uganda following allegations of deep-rooted corruption in the Office of the Prime Minister. The prime minister, the former energy minister and the foreign affairs minister were all accused of taking kick-backs from oil companies in 2011, charges that remain unproven but that nevertheless damage the reputation of the government.

“The country lacks trust in the state… Institutions and officials have lost legitimacy, and for such an important bill to vest too much power into a political appointee is a recipe for disaster,” said Stephen Oola, a transitional justice and governance analyst at Uganda’s Makerere University Refugee Law Project.

“Granting and revoking licenses and negotiations are technical in nature. We need an independent commission or authority made up of people of good competence, technical ability and experience, and good morals to guard our oil,” said Frank Gashumba, a local businessman and social activist.

Proponents of Clause 9 say licensing powers are safer in the hands of the cabinet than under an oil authority. “The authority is open, easy to bribe and manipulate. Cabinet is bigger than the authority – members of the executive are answerable to Ugandans because they are elected leaders,” said Kenneth Omona, a ruling party MP.

Those opposed to it say they will challenge the law, which was passed with 149 votes in favour and 39 against; some 198 MPs did not turn up to vote.

“The fight is not complete; the passing of the bill is liable to be challenged in courts of law,” said Theodore Ssekikubo, ruling party MP and chair of the parliamentary forum on oil and gas. “If we fail to go to court, we shall subject the matter to a referendum for all Ugandans to pronounce themselves on this strategic resource. We want to ensure transparency and accountability in the oil sector.”

Transparency

There are also concerns about the law’s confidentiality clause, which limits the amount of information accessible by the public.

“The law is lacking transparency – it imposes confidentiality on officials working within the sector, even after they leave office, so there is no opportunity for whistle-blowing or for the public to have access to information on, say, production-sharing agreements,” GLPA’s Otoa said.

He noted that Uganda still hasn’t joined the Extractive Industries Transparency Initiative (EITI), an international scheme that attempts to set a global standard for transparency in oil, gas and mining, further compounding the sector’s lack of transparency. As a member of the EITI, Uganda and oil companies involved in the country would be required to publish all payments and revenues from the industry.

While Total and the China National Offshore Oil Corporation (CNOOC), two of Uganda’s major oil partners, are listed on Wall Street and are therefore subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act – which requires disclosure of payments relating to the acquisition of licenses for exploration and production of oil, gas and minerals – the Irish firm Tullow Oil, another of Uganda’s main oil partners, is not under any similar obligations.

“I am worried we [legislators] and the public can’t access and scrutinize these agreements. You can imagine the recently negotiated and signed oil agreements have not been accessed by the public, not even by members of parliament,” Beatrice Anywar, former shadow energy minister, told IRIN.

The impact of the oil sector has so far been most acutely felt by communities around Lake Albert, thousands of whom have had to move – some willingly and some forcefully – to make room for an oil refinery, which is expected to take up 29sqkm and displace some 8,000 people.

Land issues

“The government is prosecuting the refinery resettlement by the book. However, managing public expectations and the process of multiple decision makers in Uganda’s complex land legal system [Uganda has multiple land systems, including customary, leasehold and freehold] has contributed some volatility to the process… What is adequate compensation? And who determines that? Is it the market or should this be done by the government?” said journalist Izama.

“As a partner to the oil companies, it’s questionable too if the government can make the best decisions for the affected people as it would look to keep project costs fairly low,” he continued. “It is still a dilemma which is jurisprudential as well as political.”

He noted that much of the oil is in game reserves and a sensitive basin with lakes, rivers and a rare biodiversity, and borders the Democratic Republic of Congo, which could also pose challenges for peaceful production; there has already been some tension between the two countries over their boundaries within Lake Albert.

“The process of consensus-building is still weak, and regardless of how it’s arrived at, displacements will create uncomfortable realities, including land and job pressure.”

According to Otoa, Uganda’s lack of a comprehensive land policy makes compensation issues more complex. “We need clear land policies to ensure people are properly compensated – there is a Resettlement Action Plan in place, but it has not been implemented, and a draft land policy has not been actualized, leaving these communities vulnerable,” he said.

He noted that the lack of education among the local population, both in the oil-rich areas and the rest of the country, had contributed to the continued problems in the sector.

“We have focused too much on educating MPs on the implications and importance of good oil governance. We need to move to people-centred approaches and encourage dialogue in the public sphere, which will lead to people demanding accountability from their MPs and the government,” he added.

Ultimately, Izama said, responsible actions by the government will be the difference between Uganda’s oil making a significant impact on the country’s economy or causing conflict and greater poverty.

“Pressure on public institutions prior to commercial oil production is an effective way of counteracting the resource curse. If this public engagement falters, if the transition [from President Museveni to his successor] is volatile, some of the scenarios of the so-called oil curse are possible,” he said. “Overall the tensions are high, but responsible actions by public and political institutions like the past debate show progress is possible.”

South Africa: Gordhan’s war on incompetence and impunity


Mail & Guardian

By Faranaaz Parker

July 24, 2012

Finance Minister Pravin Gordhan has revealed plans for the national treasury to take a much tighter grip on local governments‘ finances. See the full report here.

Following the release of a damning report on the scale of mismanagement at municipal levels, Finance Minister Pravin Gordhan on Monday revealed that the national treasury would take a tighter grip on procurement processes across the country.

Gordhan announced that treasury would create a procurement oversight unit to actively enforce supply chain management at a national level and would shortly appoint a chief procurement officer. The position would be advertised in two weeks and would be established within the next two months.

“Where there are transactions for a particular size or type within the national domain there must be the ability to assess whether they meet market criteria in terms of prices [and] whether proper processes havebeen followed,” he said.

The announcement was an indictment of local government’s failure to spend and account for public money effectively.

The minister was speaking at the release of auditor general Terence Nombembe’s report on local government audit results, which showed that only 5% of all municipal entities – a total of 13 – had achieved clean audits for the year 2010/2011.

Gordhan said IT systems would be developed to allow the treasury to actively monitor compliance with financial management requirements so that it may demand information regarding procurements, such as how decisions were made and by whom.

Spending fiascos

The move may help prevent public spending fiascos such as the multibillion-rand leasing scandal that saw former police chief Bheki Cele and former public works minister Gwen Mahlangu-Nkabinde sacked last year.

Gordhan said the government should be able to demonstrate that there were consequences for nonperformance and for working outside the law.

“At the moment, those consequences are not there. When consequences are not there continuously then a level of impunity develops,” he said.

He said the new oversight mechanism would require the help of law enforcement agencies, who would bear the responsibility of preparing cases against and prosecuting those guilty of corruption.

With reference to the auditor general’s report, Gordhan said he was particularly disappointed that some large metros, which had better skills and capacity than small municipalities, did not received clean audits.

“If they can’t meet simple criteria in financial management, then it’s a matter the treasury has to take a closer look at,” he said.

Nombembe’s damning report
Nombembe’s report showed there were three root causes behind the slow progress towards clean audits in local government.

The biggest problem, he said, was a general lack of consequence for poor performance. Modified audit results were simply considered the norm, he said.

In addition, over 70% of those audited did not have the minimum competencies and skills required to perform their jobs.

Worryingly, over half of the municipalities audited were slow in responding to the auditor general’s suggestions and were not taking ownership of key financial controls.

Nombembe said if these issues were not addressed, they would continue to weaken governance.

He also complained that most municipalities employed consultants in areas where they already had people to do the work, and even then the results were not as good as they should be.

Cedric Frolick, National Assembly house chairperson, agreed, saying: “What are the employees doing when 70% of the work is being done by people who must be paid for it on top of their salaries?”

“Why are people who are not doing their job, being allowed to keep on [not] doing it?”

Meeting the criteria
But Minister in the Presidency responsible for performance, monitoring and evaluation Collins Chabane said because of the way the three spheres of government were structured, it was difficult to make interventions in local government unless specific criteria had been met.

“It creates a complication where no other authority can intervene, by law, until that municipality makes a decision,” he said.

Chabane said in future, the performance of departments and institutions may be linked to the performance of the heads of those institutions.

“That will begin to bring accountability,” he said.

Meanwhile Subesh Pillay, chairperson of the South African Local Government Association, said it was important to remember that clean audits were a means to an end.

“That end is to ensure that local government become efficient and effective organs of service delivery,” he said.

Kenya President vetoes huge bonuses for parliament


AP via Huffington Post

TOM ODULA

October 10th, 2012

NAIROBI, Kenya — Kenya’s president vetoed a move by the country’s parliament to award legislators bonuses of up to $110,000 at the end of their term next year.

The move is unconstitutional and untenable in the country’s prevailing economic circumstances, President Mwai Kibaki said late Tuesday.

Kibaki noted recent increases of salaries for teachers and doctors, and said Kenya requires massive resources to implement a new constitution and meet other competing demands in the economy.

The legislators last week quietly awarded themselves the bonuses, sparking public outrage.

On Tuesday, at least 100 people, including a popular Kenyan musician, protested outside parliament shouting “thieves” and urging the president not to approve the pay bill.

Kenya’s 222 legislators currently make about $120,000 a year each. The minimum wage in Nairobi, the capital, is about $1,500 a year.

Kenyan parliamentarians are fast earning a reputation for trying to give themselves expensive perks. Last year parliament attempted to raise their annual pay to $175,000 but the idea was met with such fierce public resistance that they shelved the plan. Earlier this year parliament inaugurated a new 350-seat chamber, where each of the seats cost about $3,000.

Human rights and anti-corruption activists say the motion to increase the parliament’s bonus to $110,000 – a vote that passed Thursday night with only about 30 legislators present – violates the country’s 2010 constitution, which does not allow parliament to set its own pay.

Over 200,000 high school and primary school teachers held a strike last month over pay. The government bowed to the demands after three weeks of arguing there was no more money to raise the salaries.

Doctors called off their strike last week after walking out for 18 days to protest the poor state of public hospitals where some of the doctors have had to use their lights from their mobile phones in emergency situations to conduct procedures.

Nigeria: Civil society tasks Fashola on procurement, tenancy bills


Vanguard

June 27, 2011

By Victor Ahiuma-Young
Lagos State Civil Society Partnership, LACSOP, has called on Governor Babatunde Fashola to urgently assent to Lagos State Procurement Bill, Lagos State Tenancy Bill, Lagos State Public Finance Management Bill,  the Criminal Law of Lagos State Bill and others passed by the State House of Assembly between 2009 and 2011, saying when assented to,  they will impact positively on the lives of millions of Lagosians…The statement by Mr. Ayo Adebusoye for LACSOP Steering Committee, read in part: “Rising from a recent meeting of the group’s Steering Committee, the group noted that some of these bills like to the Lagos State Procurement Bill 2009, Lagos State Tenancy Bill 2009, Lagos State Public Finance Management Bill 2010, all passed on Wednesday 25th May, 2011 and the Criminal Law of Lagos State Bill 2010, passed on Thursday June 2nd 2011, are bills that In view of the imperative need for adequate legislation to cater for issues emerging from the state government developmental drive, LACSOP is using this opportunity to encourage His Excellency to give urgent and priority attention to these all important bills in the first weeks of his new administration with a view to ensuring that no time is wasted before they are assented to.” Read more.

Beyond the GDP frontier: A ‘comparative understanding’ of U.S. contractual overspending and delays


Personal flag of the office holder of the Insp...
Image via Wikipedia

Traditional ways of approaching issues of development give preference to questions that seek to establish differences between developed and developing countries  on specific issues. Put differently, we are used to defining and deriving policy from the experiences of states that distinguish themselves from rank-and-file statehood in the world system. For instance, it is customary to compare the U.S. and Africa’s GDP and derive inferences for African reforms more or less suggested by the path  the U.S. took.

To some extent, this ‘prescriptive’ approach is reasonable because it allows developing countries to learn from developed countries without having to reinvent the wheel of development. Nevertheless, knowledge and intervention derived from ‘prescriptive’ comparative studies that solely focus on  differences between developed and developing countries often fail to produce expected outcomes because they pay little or no attention to the learning processes of developing countries. Thus, while the emphasis on ‘difference’ is suited for prescriptive policies, it  remains ill-fitted for ‘comparative understanding’ of important politico-economic problems in the world.

In contrast to GDP and other differential markers used to measure the evolution of societies and politico-economic institutions in the world system, similarity-based comparison yields high pedagogical value for both developed and developing countries. Public procurement is one of the many areas of study amendable to such a similarity-based comparison. With procurement studies, one could appreciate similarity and adopt a comprehensive  –and, might I suggest, more humble? — approach to development models for developing countries. More often than not, mistakes made by government officials and parastatal procuring entities point to the same challenges that  developed and developing states face. Two procurement stories involving the U.S. government at home and abroad illustrate this point.

In a televised interview recorded in Sept. 2010, Ashton Carter, the U.S. Under Secretary of Defense for Acquisition,Technology and Logistics, announced that the defense budget won’t go up or down but should stay within the limits of “the resources that the country and the taxpayer can afford.” He also predicted that the new post-9/11 era is going to be ‘good for industry and government.’


 

However, a report on the administration of provisions to troops in Afghanistan by the Inspector General of the United States Department of Defense released on March 2, 2011 shows that what is ‘good for government and for industry’ might exceed what the U.S taxpayer can afford. The report shows that the Defense Logistic Agency failed to provide ‘sufficient oversight of contract, cost, and performance.’ That is, the vendor for food products for Afghanistan was overpaid for work that remains incomplete.

What is interesting in this story is the ways in which the initial contract with the food vendor for Afghanistan was changed through a simple verbal order, which, as the Inspector General found, violated the provisions of the Federal Acquisition Regulation and Defense Federal Acquisition Regulation Supplement. The report clearly states that the  verbal change of the contracting order by U.S. officials led to overpayment of the food supplier in Afghanistan. Because the modification of the initial contract through a verbal agreement between U.S. contracting officers and the Afghanistan food supplier was not definitized, transportation costs were exaggerated and the contractor was overpaid. Hence the verdict of insufficient oversight of cost.

Unfortunately, delays and overpayment related to cost assessment  are not limited to U.S. activities abroad and in combat zones. Last year, the Inspector General for the U.S. Department of Veteran Affairs (VA) audited the Strategic Asset Management Pilot (SAM) project and found that the managers did not control cost. In the report, selected contractors unfamiliar with  the VA’s needs poorly managed risk. Consequently, the SAM pilot project  was delayed by more than 17 months  potentially ‘doubling the original contract cost of $ 8 million.’

Delays, overspending and missed deadlines, poor cost  and risk assessment in public contract renegotiation  makes the U.S. procurement system less than perfect. In this sense, contract renegotiation mistakes made with the food vendor in Afghanistan and delays with the SAM project are similar to procurement challenges in  Cameroon and Zimbabwe commented on last week.

Procurement challenges observed in Cameroon, Zimbabwe and the U.S. at the implementation and renegotiation phases highlight relative similarities between developing and developed countries in the management of public finances. Attention to government procurement makes the case for unbiased similarity-based case selection for  ‘comparative understanding’ that could yield high pedagogical value because of the preeminent roles that decision making and forecasting play in defining outcomes. S.N. Nyeck.

Related Articles

Cameroon: Parliament officials to better manage public contracts


AllAfrica.com February 16, 2011.

Public contracts in Cameroon’s National Assembly will henceforth be better awarded and their execution followed-up thanks to a three-day training staff in charge of the management of the public contracts received last February 8 to 10. Experts from the Public Contracts Regulatory Agency (ARMP) carried out the training on the theme, “National Procedures for the award and follow-up of public contracts.” The training was organized on the request of the Speaker of Parliament, Hon. Cavaye Yeguie Djibril. Read more

Blog at WordPress.com.

Up ↑

%d bloggers like this: