Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI



Kenya Set To Resort To Online To Fight Graft

NAIROBI, (Xinhua) — Kenyan President Uhuru Kenyatta said Wednesday he will set up a website in an effort to fight corruption which has retarded development in the East African Nation.

Kenyatta, who officially launched the 30 percent affirmative action of government procurement for women, youth and persons with disability in Nairobi, said the website will enable the public to report government officials who engage in graft, so that appropriate action would be taken against them.

The president warned public officials that his government will not tolerate graft, saying the days of corrupt officials in service are numbered and called for joint efforts to wipe out the vice.

“We have reached a point where if you want to keep your government job, you must be satisfied with the salary you are paid. If you think it is not enough, you are free to quit and look for other forms of employment,” he warned.

The warning came as the authorities took war against graft a notch higher in the most credible attempt so far to showcase Kenyatta’s acumen as a reform-minded African leader serving his first term in office.

The president also warned the Public Procurement Directorate to seal all loopholes that would allow corruption to compromise the procurement process, saying no laxity on their part will be tolerated.

He said he would closely monitor the allocation of the 30 percent government procurement to see exactly how many women, youths and persons with disability benefit.

 “For far too long we have characterized our women as people who are dependent. I want them to be people who we can depend on. Our youth were viewed as people who lacked vision and direction, I want to make them the engine that drives Kenya,” he said.

The president said if the 30 percent procurement allocation to the youth, women and persons with disability was replicated in all 47 counties and in the private sector, poverty would significantly reduce in the country.

The Wheels of Corruption


November29, 2012

Corruption is a lethal toxin that kills the spirit of free enterprise and public governance excellence in South Africa. It is a risk and reward game played by ruthless legal-wise people who seduce naïvely ambitious public officials and turn them into criminals.

According to an article published in the Economist in 2011, as much as 20-25% of annual state procurement expenditure in South Africa amounting to around R30 billion is wasted through overpayment and corruption. The auditor-general estimated that R26 billion is wasted or spent “irregularly” in a year. A third of government departments award contracts to officials and close family members, it was reckoned.

Many people in South Africa sacrificed for a free society and the jubilation that came with advent of democracy in 1994. Some of these people benefited handsomely from the fruits of their sacrifices and were rewarded for life, without the aid of corruption.  Some were not so fortunate though. Those who thought that free enterprise would take off without corruption and prejudice made a serious judgemental error. Their sacrifices did not transform into lifetime rewards. They became the first victims of early bouts of the plague of corruption that is now taking its toll in South Africa.

Corruption is the pursuit by dishonest people in devious partnerships and networks with the goal to acquire undue wealth and benefits for members who are prepared to partake in illicit and dodgy behaviour. Corruption is usually taken to mean dishonest or fraudulent conduct by people in positions with influence and power.

Imagine the following scenario from more than a decade ago. A senior black consultant teamed up with a white entrepreneur skilled in program management to start a legitimate program management firm to facilitate the rolling out of much needed municipal services and local economic development in poor communities. Initially the firm succeeds in winning small projects. With repeated successful delivery the scope and value of projects increase to a point where executives in contracting organizations hint that contract benefits must be shared and that firms they hold shares in must also benefit through projects. When one such a senior executive of a public enterprise, which contracted the firm to program manage its market development strategy, stopped payment on a contract to enhance the performance of a municipality, the wheels of corruption revealed itself.

The affected firm lodged a complaint over non-payment with the chief executive of the public enterprise and after an investigation he agreed to institute a process of arbitration. This was when things started to get interesting. It was established that a firm in which the senior public enterprise executive had been given a shareholding was awarded an infrastructure development contract in the same municipality. The project was connected to the scope and budget of the program management contract and payments were made from the budget set aside for the program management firm. It was when this budget ran out that the payments to the program management firm were stopped.

The legal department of the public enterprise engaged a law firm to handle the arbitration process. The arbitration costs would be for the account of the public enterprise. The firm of attorneys engaged by the public enterprise appointed a senior advocate as arbitrator who had previously handled cases for the public enterprise. At the start of the arbitration proceedings the arbitrator offered to withdraw from the case because the public enterprise had been his client in several previous cases. The directors of the aggrieved firm, wary of possible prejudice, accepted his offer. It was agreed that the process would be repeated with a new arbitrator.

The process to appoint a new arbitrator started and after several weeks a new lawyer was appointed as arbitrator by the law firm of the public enterprise. This time the directors of the aggrieved firm were required to foot the bill of the arbitrator and the fees of a lawyer to represent the aggrieved firm as required by Supreme Court rules. These extra costs and the non-payment of contract fees placed the aggrieved firm in financial dire straits.

Several weeks had passed after the hearing when the arbitrator demanded payment from the directors of the aggrieved firm before publishing his ruling. He had to be paid before he would reveal his ruling. When he released his ruling after payment, he had ruled in favour of the public enterprise. After the ruling the distraught directors of the aggrieved firm learnt that the arbitrator had his offices in the same building as the law firm that had appointed him. They then understood the intimate resonance they sensed between the arbitrator and the legal representatives of the public enterprise during the hearings.

The directors of the aggrieved firm felt shattered and decided to close down their firm because of the ruling, the unpredictability of payment by the public sector and the enterprise-unfriendly legal environment.

The set of wheels which moved the corruption to its destructive conclusion comprised of an ineffective procurement leadership structure operating without a policy that prohibits public enterprise officials from taking up shareholding in private firms that deal with the public enterprise; a greedy official with shares in a predatory firm; the owners of the predatory firm who colluded with the official; and a network of legal experts familiar with the arguments, precedent rulings, court rules, contract laws and pressures that are needed to protect the felonious officials of a contracting public enterprise from the claims of cocky entrepreneurs and the victims of corruption.

The appearance of Public Protector Thuli Madonsela who understands the dynamics and networks that drive corruption so well had become the saviour and fountain of hope for entrepreneurs. She has brought closure and redemption to many of those castigated emotionally and financially by corruption. She had become the quiet and gentle enforcer of procurement discipline and public servant ethics. The people salute her and trust that she will continue to be the enemy of corruption and the flame of governance excellence and that she will succeed in removing evil from our society. She has truly become the people’s trusted chucker-out of corruption, fraud, mal-administration and improper enrichment at the expense of the state.

Uganda Oil Contracts Cloaked in Secrecy

Voice of America

By Douglas Mpuga

May 26th, 2012

This is Part Two of a five-part series on oil contracts in Uganda
Continue to Parts:     1 / 2 / 3 / 4 / 5 

In Uganda, critics argue for public access to details of contracts between government and oil companies.

When billions of barrels of oil reserves were found in Uganda five years ago, the discovery seemed like a gift from heaven to many in this East African, poor, landlocked country.

But as Douglas Mpuga reports in this first of a five- part series, Uganda’s oil sector has so far been characterized by high level secrecy that critics say is unlawful.

Oil wells are expected to start pumping within five years, and bring along with it about two billion dollars per year, according to government officials.

Many analysts are hopeful that could propel Uganda into the strata of middle-income countries, where few sub-Saharan African countries rank. A refinery will be built – providing revenues for improved roads, bridges and other infrastructure.

Three foreign companies are involved in oil exploration in the country: UK-based Tullow Oil, which has been operating in Uganda since 2006, and two other companies to which it has sold part of its investments — France’s Total SA (TOT) and China’s CNOOC Ltd.

The government has signed deals with the companies.  But few Ugandans know what is in the agreements.  The government insists that it will not release details of the agreements citing confidentiality clauses that bind it and Parliament from disclosing their contents to third parties.

Two senior Ugandan journalists took government to court seeking this information after the failure of repeated calls for the release of the details.

“We are suspicious why the government wants to handle this oil exploration program with a lot of secrecy,” said one of the journalists, Charles Mwanguhya Mpagi, the political editor of The Daily Monitor newspaper.  “We are looking at examples such as Ghana where they have their agreements on the internet. We are looking at Norway which has this information available.”

According to Mwanguhya Mpagi: “We suspect government has always been reluctant to share information with the Ugandan public. The other thing we have been told, from what has leaked out, is that the agreements are not entirely bad. So we are puzzled why the government is reluctant.”

But the legal process has not been smooth:  a lower court dismissed the journalist’s initial request but now the High Court may consider the appeal.

“Our initial petition to the court was not limited,” said Mpagi, adding “What we asked government to do was to rely on the constitution to be more transparent in its dealings with the oil industry, what agreements it is entering into with the prospectors.”

“We lost in the lower court, “ he continued, “because the magistrate wasn’t convinced that accessing this information would benefit the Ugandan public. But he forgot that we are journalists who would share this information with the public. This is what we intend to push for in our appeal.”

The journalists’ campaign has been boosted by four organizations seeking to become party to the case. Describing themselves as friends of the court, they say they are advocating for the right of the public to know about national and regional energy policies that aim in part to help eradicate poverty.

Meanwhile, Ugandans wait for the day when the first barrel will be exported.

The Winter Kabimba – Led Mission of Inquiry Into the Energy Regulation Board


By Mr. Brown Chibale Kapika

April 22, 2012

The Kabimba led Commission over the Energy Regulation Board Investigations involving more than 2 trillion kwacha oil procurement embezzled by named former government officials was the best and brave commission of inquiry Zambia has ever had since independence.

This Kabimba – led Commission of Inquiry came out with a very strong conclusion and a warning message to the Nation. It was not a witch hunting, but a real statement containing real facts including amounts of figure in millions, Contracts signed, Tender numbers, Names of Suppliers or Companies, Dates, Cargos, and all names of former government officials involved in this scandal.

However, I, as President of Adedo Zamucano and on behalf of Zambian People, recommend Mr. Kabimba and his group who sacrifice their time on this national duty for a job well done. I also thank President Sata for his courageous step he took to appoint Mr. Kabimba to head the commission of Energy Regulation Board Investigation…Read more

By Mr. Brown Chibale Kapika (BCK)

President for Adedo Zamucano Political Party – Zambia

Watchdog group warns of oil corruption in Liberia

Voice of America

By James Butty

A new Global Witness report says corruption is rampant in Liberia‘s oil sector even before any oil is discovered

The international watchdog group Global Witness says corruption is rampant in Liberia’s oil sector, even before any oil has been discovered.  In a report Monday, the group said government and business officials have been involved in bribery to get contracts approved.

Global Witness campaigner Natalie Ashworth said some government officials choose to “break their own laws.

There were three findings which highlight the problems.  First, we discussed evidence of the payment of lobbying fees. NOCAL, which is the National Oil Company, paid lobbying fees to the legislators to get oil contracts passed. The second is an inadequate legislative framework to protect communities and the environment and, thirdly, there is a lack of capacity by the National Oil Company and by the EPA, which is the Environmental Protection Agency, which oversees the environment sector,” she said.

Ashworth said the report calls on the government to investigate evidence of corruption in the oil sector.

“When it comes to the National Oil Company, we’re recommending a number of things.  One, we’re recommending that all the allegations that are in the report and in the General Auditing Commission audit of the National Oil Company need to be investigated.  We are also recommending that the power to regulate be taken away from the National Oil Company and given to a separate agency,” Ashworth said.

The report said the actions by some lawmakers to accept bribes are against Liberian laws.

“Liberia’s penal code makes specific reference to bribery, and the general auditor has deemed these lobbying fees to be bribes,” she said.

The report said Monrovia has made some promising improvements in the resource sector.  But, Ashworth said these changes have been poorly managed.

Christopher Neyor, president and CEO of the National Oil Company of Liberia, questions the timing of the global witness report, especially as Liberia prepares for next month’s presidential elections.

He said the government was already implementing some of the recommendations contained in the global witness report.

“Our position on this Global Witness report is clear. We are delighted that they have acknowledged that the president has appointed someone with a reformist agenda and they had earlier spoken with us and we had given them the outline of our agenda. So, basically, while we appreciate the input of Global Witness, just about all what they are recommending are things that we initiated and, not only initiated, we [are] implementing at the National Oil Company,” Neyor said.

He said, in a sense, the government agrees with much of the findings in the Global Witness report.

Neyor said there is nothing new about NOCAL paying members of the Liberian legislature lobbying fees to ratify oil contracts between 2006 and 2008.

“That again is nothing new; it’s been around for a while in the media. It has been debated and the debate had centered on the definition of the lobbying fee, or facilitation fee, or what you may call it.  There are some people who like to call it a bribe,” Neyor said.

Ghana: Procurement Authority calls for ceasefire over EC’s biometric brouhaha

Voter Registration
Image by crownjewel82 via Flickr

The Ghanaian Chronicle

The Public Procurement Authority (PPA), has appealed to parties involved in the procurement of equipment for the Biometric Voter Registration System to exercise restraint and wait for the court ruling on the matter.

“The PPA will urge all the parties concerned and the general public to exercise restraint as we await the ruling of the law courts in this matter.

The PPA is a creation of the Public Procurement Act, 2003 (Act 663) mandated to regulate, assess and ensure full compliance by entities to all the provisions of the Act. It does not undertake procurement on behalf of entities but rather seeks to build their capacities to enable effective implementation of the Act,” according to a statement issued in Accra.

The statement was to react to public concerns expressed over the procurement issues and see to bring to the attention of the general public the bare facts and apprise them on the status of the issue.

On the 15th of August, 2011, a petition was received by the PPA from a Complainant-Intelligent Card Productions Systems (ICPS) for an Administrative Review to be conducted in respect of a tender for the Procurement of the Biometric Voter Registration.

The Complainant per its Solicitor purported that their tender for that particular procurement had been disqualified by the Respondent-Electoral Commission on the basis of non-conformance with clause 22 (b) of the Public Procurement Act, 2003 (Act 663) by not submitting a Certificate of Incorporation.

This, the Complainant claimed, had not been specifically stated or pre-disclosed as a qualifying criterion in the tender documents as required under procurement principles.

The petition further contended that, contrary to the provisions of the Act 633, the Respondent-Electoral Commission invited seven firms instead of the previously five pre-qualified firms.

Thus, the Complainant deemed the action of the Respondent to be unfair, arbitrary, capricious and unconstitutional and therefore sought to secure a number of reliefs.

In response, the Respondent has denied the Complainant’s assertions. Following detailed review of documents and correspondence from both parties, the PPA called for the suspension of the tender process for 30 days to enable it conduct its administrative review of the matter.

However, before the PPA could conclude the administrative review process, it was notified by Solicitors of the Complainant that it has reinstituted legal proceedings against the Respondent.

Thus, the PPA is unable to proceed on the matter pending before court and, therefore, sub-judice. GNA

Zimbabwe: Corporate Governance – An Antidote to Corruption

Cartoon showing statue of Andrew Jackson on a ...
Image via Wikipedia

The Herald (Harare)
Published by the government of Zimbabwe

By Gertrude R. Takawira

12 September 2011


It has rendered to naught brilliant economic reforms. Most people hate it. A few benefit from it. Yet corruption is strong enough to have replaced traditional economic ethos of capital and production. No wonder the economic crises.

Like economics there is a supply-side and demand-side for corruption. The supply-side or the giver resides in businesses. Businesses pay the bribes. The demand side or taker is predominantly government officials.

In a survey carried out by the African Capital Markets Forum in Ghana during the year 2000, it was reported that 86 percent of households saw corruption as a major problem in the public sector, whereas 59 percent of households saw corruption as a major problem in the private sector.

It was also found that many firms in Ghana made unofficial payments (44 percent) to public officials with over a quarter (27 percent) frequently or always making such payments. Unofficial payments constituted a regular feature of transactions between business firms and public service agencies. 56 percent of firms reported that service was frequently delivered once they made an unofficial payment… Why then do corporations with good corporate governance systems pay bribes? First there has to be a conducive atmosphere for the supply and demand of bribery. This can take place in broad ranges of business activities over which some government officials hold discretionary powers.

Common among these are; where firms bribe public officials to avoid or reduce tax, to secure public procurement contracts, to bypass laws and regulations, or to block the entry of potential competitors.

On the surface bribery seems to be cost-effective for businesses because bribe payment is often a fraction of the monetary value of the services rendered by the corrupt officials.

The reason to bribe becomes even more compelling when public officials hold the power to punish the firms for not paying the bribe, such as revoking business licenses. Corporates are often duped to believe that the only cost of bribery is paying the government officials… Read more.

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