Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI



Namibia Procurement Fund faces closure

Namibia Economist

BY Ogone Tlhage

JANUARY 30, 2015

The Namibia Procurement Fund faces closure should the Namibia Financial Institutions Supervisory Authority (Namfisa) not change its stance with regard to close corporations. This apparent paradox was revealed by the fund’s Chairman, Derek Wright at a dividend handover this week.

Lambasting the regulatory authority, a visibly emotional Wright said, “NAMFISA refuses to recognise the Namibia Procurement Fund as a special purpose vehicle and as a result the fund will cease to exist.”


The Namibia Procurement Fund provides small and medium enterprises registered as close corporations with finance.
According to Wright, the Namibia Procurement Fund is the only viable financier with an assessment model and risk appetite in place to provide close corporations with finance. He added, “Close corporations are not seen as secure investments.

The Government Institutions Pension Fund has appointed the Namibia Procurement Fund as a special purpose vehicle as part of its Unlisted Investment Portfolio. Under Regulation 29 to the Pension fund Act, the GIPF, like any other pension fund, is mandated to invest a maximum of 3.5% of its total assets in unlisted investments, through so-called Special Purpose Vehicles. Wright charged, “You do not have to be a proprietary limited to remove risk. As long as there is a system in place, there is no risk involved. There is no risk whatsoever with regards to investing in close corporations. Our controls are there as a security blanket. We have a fiduciary responsibility to invest on behalf of the GIPF. There is a screw lose somewhere in NAMFISA.”


Highlighting the successes of the Namibia Procurement Fund, Wright said that in the past four and a half years, the fund has been able to financially support more than 100 small and medium enterprises, funding transactions in excess of N$450 million, thus creating 200 new jobs and retaining over 1000 jobs.  When approached for comment, Wright said that the Namibia Procurement Fund had engaged the Namibia Financial Institutions Supervisory Authority, calling on it to change its stance with regard to close corporations.

“Namfisa needs to get off its bureaucratic stool,” said Wright. Asked what lay ahead Wright sounded optimistic saying that the fund was looking to increase the dividend hand-over by double the amount generated at the close of the 2013-2014 financial year which amounted to N$7.8 million.

Namibian government needs to ‘close anti-corruption gaps’

15 December 2013 | Will Green

A think tank has criticized Namibian government procurement as “not always based on transparency, competition and objective criteria”

The Institute for Public Policy Research (IPPR) said the government needed to “close anti-corruption gaps” to bring it into line with the United Nations Convention Against Corruption (UNCAC).

The IPPR said it had identified a number of areas where there were “weaknesses” in terms of compliance with UNCAC, to which the government is a signatory, including a lack of laws covering whistleblowing, declaration of assets by public servants and access to information; and transparency over finances.

Namibia’s public procurement decision-making is not always based on transparency, competition and objective criteria,” said the IPPR.

Meanwhile, the Public Procurement Bill, intended to overhaul government procurement processes, has been withdrawn from parliament “until further notice” following criticism from parliamentarians, the state-owned newspaper New Era reported.

The Namibian government’s Anti-Corruption Commission did not respond to SM’s request for comment.

Namibia: Procurement Bill Sparks Heated Debate

By Tonateni Shidhudhu

October 3rd, 2013

Windhoek — The Public Procurement Bill that is currently being debated in the National Assembly is likely to be rejected, following strong criticism by several MPs on both sides of the house.

Debate resumed on Tuesday on the proposed law. Lawmakers are unhappy with the way the Bill was drafted, arguing that the role of government and that of new institutions to be created under the proposed law is not clear, and that the Bill has the potential to disadvantage businesses that are run by black Namibians. The debate was delayed last week, when lawmakers requested a workshop on the Bill to get a clear understanding of what the proposed legislation entails.

Swapo Party MP Kazenambo Kazenambo criticized the Bill calling on the Finance Minister

Saara Kuugongelwa-Amadhila to refer it back to the drafters. “I don’t see how the Ministry of Finance as an entity and other ministries are involved in the procurement system. I don’t understand the role of the Procurement Policy Office, there are so many offices and it is not clear who is supervising who, [since] the functions and powers of these offices are overlapping,” he said.

Kazenambo wants the finance minister to clarify the role of the institutions that are provided for in the Bill and how they differ from one another and also questioned the status of the Central Procurement Board and whether it is going to function as a parastatal or under which category of governance it would be placed.

If the Bill is passed, it will create a Central Procurement Board (CPB) to replace the current Tender Board that has had its fair share of controversy over the years. Kazenambo also queried why CPB members are given unlimited powers, especially that of extracting information about anyone bidding for a public tender, including their financial records. “I am seeing scandals coming, we live in this country as business [people], we are subjected to harassment and discrimination and sometimes just because you are black, people question from where you got the money,” he said. In terms of the Bill the Procurement Policy Office wil have the responsibility of advising the minister on policies, guidelines, standards and manuals required to maintain an internationally competitive public procurement system in Namibia. The office will also be responsible for recommending thresholds, disqualifying, debarring and suspending suppliers and conducting investigations where necessary.

This, according to Kazenambo, if not handled properly, has the potential to discriminate against locally manufactured products, especially those from businesses that are run by black Namibians. He made it clear that he is not in support of the current format of the Bill and walked out of parliament following his contribution, returning only later.

Swapo Party Chief Whip Professor Peter Katjavivi said while the Bill appears to be a tool of empowerment for disadvantaged communities, particularly women and young people, there are still issues that need to be clarified or rectified. He warned against the bureaucratic delays that may occur due to the various structures provided for under the proposed law. “The multiplicity of entities within the Bill creates a worry over bureaucratic delays. If you have the Procurement Policy Office, the Central Procurement Board, the Procurement Committee, the Procurement Management Units and Bid Evaluation Committee, probably we do not need the bid evaluation committees, because procurement committees can as well evaluate bids,” argued Katjavivi.

Lawmakers also feel that not enough public consultation took place with stakeholders to enable them to provide their inputs. Swanu president Usutuaije Maamberua said although a few meetings were held during the drafting of the Bill, there is a need for broader consultation. He was also dissatisfied that the Bill aims to provide preferential treatment to bidders from the previously disadvantaged communities only, saying 23 years after independence the nation should move on and look at the burning social question of poverty based on a broader perspective. He said it is a pity that there appears to be class discrimination in Namibia in terms of the manner in which the economy is structured, which also needs to be addressed in the Bill. “What about a poor white person, if they fall under the lower class? I am proposing that we should not only look at the previously disadvantaged communities, but all people in the lower income categories irrespective of colour.”

Maamberua who is the chairperson of the Parliamentary Standing Committee on Public Accounts is also a former permanent secretary in the Ministry of Finance. He questioned why the Bill is silent on the disposal of government assets, which is a function of the Tender Board. “The [proposed] Board (Central Procurement Board) does not have that function, which is a serious omission,” he observed and further pointed out that the Bill appears to be repealing only the current Tender Board Act 16 of 1996, but not other related Acts such as the Regional Councils Act, which also deals with public procurement.”

Presidential Affairs Minister Dr Albert Kawana adjourned the debate to next week Tuesday. Kawana is expected to offer guidance to parliament on the way forward on the contentious Bill. If the National Assembly is still divided, MPs will have to vote on whether to accept the Bill as it is or to reject it and to send it back to the finance ministry for amendment.

Namibia: Further Progress At Husab Uranium Project


May 20th, 2013

Mining engineering, procurement and construction management services provider Tenova Bateman’s Sub-Saharan Africa division was awarded a joint venture (JV) contract with engineering, consulting and project management service provider AMEC.

The JV comprises a reimbursable contract for the engineering, procurement and construction management (EPCM) of the metallurgical uranium plant for mining company Swakop Uranium’s Husab project in Namibia.

Mining Weekly on its website pages reported the contract was awarded in November last year, by Swakop Uranium, which is jointly owned by China Guangdong Nuclear Power (90 percent) and the NamibianState-owned mining company, Epangelo (10 percent).

Tenova Bateman Sub-Saharan Africa’s scope of work involves providing services related to engineering assistance, procurement, construction management and site supervision.

Tenova Bateman Sub-Saharan Africa MD Tollie Nel informed Mining Weekly the project is scheduled for handover to Swakop Uranium in October 2015.

“Situated in the Erongo Region of west-central Namibia, the Husab project is regarded as the most important uranium discovery in recent years. It is the largest granite-hosted uranium deposit in Namibia and is currently the third-largest uranium-only deposit in the world,” he said.

Swakop Uranium is developing and constructing the mine, with the Husab deposit providing the potential to produce 15 million pounds of uranium oxide a year, more than the current total uranium production of Namibia.

Elevating Namibia to second place in the world ranking of uranium producers, the project is also set to become the third-largest uranium mine in the world.

Construction is expected to last 34 months, with the mine expected to go into production towards the end of 2015.

“The project is on schedule, with the design and detailed engineering phase in progress. As this is the period of the project that is most sensitive to schedule overruns, we are providing support for AMEC in the form of engineering resources to ensure that deliverables arrive.

“Orders for most of the major procurement items, such as the mills, have been placed. The team is on site, terracing and levelling the site following the ground-breaking ceremony on April 18, which was attended by the management of China Guangdong Nuclear Powery,” explained Nel.

He added that, to date, the project has achieved an exemplary safety record of zero lost-time incidents during more than 150 000 hours worked.

“As the Husab project is located in the Namib-Naukluft National Park, environmental issues are high priority, with tight regulations to reduce the impact on the surrounding environment,” said Nel.

He noted that one of the aims of the project is to employ local labour and use local companies, given the high unemployment rate in Namibia.

“It can be impractical for a project of this size, as there are few Namibian companies that can handle the larger contracts. The route that will probably be taken to meet the local-content requirements, while still meeting project schedule and costs, is to subcontract smaller packages to local companies under the management of a major contractor, where possible.

“Based on the definitive feasibility study for the project, Husab is being developed as a low-risk, large-scale load-and-haul openpit mine, feeding ore to a conventional agitated acid leach processing plant, based on a proven flow sheet,” explained Nel.

Reserve estimations show it has a potential mine life exceeding 20 years, with uranium reserves of at least 280 million tons.

“Given the potential of the Husab project, Swakop Uranium is poised to become a substantial contributor to the Namibian economy and its local communities.

“The project will create more than 4 000 temporary jobs during construction and about 2 000 permanent operational job opportunities, including those of contractors,” said Nel.

Swakop Uranium was established in 2006 to focus on the potential of the uranium oxide-rich provinces of Namibia and produce uranium oxide as a source of fuel conversion for low-cost, environmentally friendly nuclear power.

On the outlook, Nel notes that working in Namibia is relatively easy, given the country’s good logistics infra- structure and its investor-friendly government.

“The major challenge facing the mining industry in Namibia is the environmental sensitivity, which sees government needing to balance national growth and employment level increases through the stimulation of industry, including mining, with the protection of the country’s natural heritage and con siderable biodiversity,” he says.

Nel said the outlook for mining in Namibia is buoyant.

“The country is becoming a major player in the uranium mining industry. It also has considerable gold, copper and phosphate and recently discovered iron-ore deposits in the north of the country.

Namibia: Public Procurement Bleeds Namibia


Windhoek — Despite a significant increase in public expenditure, public procurement has not brought about the desired outcomes, such as increased employment, improvement in the distribution of economic opportunities, enterprise development and economic growth and development, the Minister of Finance, Saara Kuugongelwa-Amadhila, told a Tender Board meeting held recently in Windhoek.

According to the finance minister the desired outcomes have not been reached for the most part because of leakages out of the economy. “Many tenders are awarded to foreign companies even where local companies have the capacity to perform these tenders. Goods and services procured under these contracts are sourced from outside, and too many expatriates perform work on the projects under these contracts even where locals have the skills to do so. So resources leak out of the Namibian economy as a result of this and opportunities for learning and enterprise development are forfeited,” said Kuugongelwa-Amadhila.

She added that setting tenders aside for local companies and special target groups such as women and youth for economic empowerment could address these challenges.

Additional tools recommended by Kuugongelwa-Amadhila to address these issues include a policy that some tenders should require mandatory sole contracting of Namibian companies and SME‘s, that there should be requirements for local participation in all companies to be awarded tenders and that there should be a mandatory requirement for sourcing of supplies and labour services from within Namibia.

With specific regard to procurement, the finance minister noted there is a significant increase in expectations from the public for the system to help the country overcome the challenges of unemployment and inequities and to support sustainable economic growth. With public expenditure having increased significantly in the recent past, the government’s role in the economy has grown much bigger. “We should also put in place monitoring and evaluation systems to ensure that compliance with bidding commitments are enforced and that the impact of the procurement programmes is evaluated. Companies that fail to honour their bidding commitments should be held to account,” said Kuugongelwa-Amadhila, adding that the current allegations of corruption and court challenges against the decisions of the board do not augur well for the public image of the board.

Also, she encouraged the Tender Board to look at ways to delegate the adjudication of some tenders to state-owned enterprises, local authorities and regional authorities.

She also revealed that a dedicated procurement reform project office has been set up and recruitment of staff is in progress. “The office will help drive the reform process including assisting with the drafting of the regulations for the new (tender) law once passed, and operational guidelines, as well as the setting up of the procurement advisory office and the new secretariat. I encourage the board to ponder on all the challenges and ways and means of overcoming them,” concluded Kuugongelwa-Amadhila.

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