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Politics of Ethiopia

Ethiopia: WFP Buys Record Quantity of Maize From Ethiopian Cooperative Unions


AllAfrica.com

February 26th, 2013

Addis Ababa — The United Nations World Food Programme (WFP) has announced that local farmers cooperatives in Ethiopia have begun delivering the largest amount of maize they have ever sold to WFP, enough to support more than 1.8 million people for a month.

Before the planting season last year, WFP signed forward contracts with 16 cooperative unions in Ethiopia for purchase of more than 28,000 metric tons of maize. The first deliveries on those contracts began arriving at WFP warehouses last week. The maize will be used for WFP relief distributions in Ethiopia.

“Our goal here is to support Ethiopia feeding itself,” said WFP Country Director Abdou Dieng. “Buying food for our Ethiopia operation right here in Ethiopia makes sense in cost-effectiveness, and in providing a boost for the local economy by helping small farmers to get closer to markets.”

This is being done under WFP’s Purchase for Progress initiative (P4P), which is financed by the Bill and Melinda Gates Foundation and implemented in collaboration with the government of Ethiopia through the Agricultural Transformation Agency (ATA).

The forward delivery contracts signed with the cooperatives are one approach the P4P pilot initiative is testing to promote small farmers’ access to markets. To support the cooperatives in fulfilling their contracts, WFP provides technical assistance to farmers associations for storage and post-harvest handling and logistical support. Through agreements with local banks, several agricultural cooperatives were able to use their WFP contracts as collateral for loans to buy new equipment and aggregate more maize from their members.

In Ethiopia, WFP buys food grown locally in two ways: It buys from small-scale farmers and farmer cooperatives through P4P, and also buys large quantities of locally grown commodities through its regular procurement tender process.

In 2012, WFP purchased more than 112,000 metric tons of food in Ethiopia, more than any other country on the continent.

About 90 percent of this food has been used directly for WFP operations within Ethiopia. For example, more than 37 schools taking part in the WFP school meal programme in Ethiopia receive food harvested nearby.

Last year WFP assisted more than six million people throughout Ethiopia, including refugees.

 

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

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