AfDB approves the new Bank Group Procurement Framework

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On October 14, 2015, the Board of Directors of the African Development Bank Group (AfDB) approved the Bank’s new procurement framework. The need for a comprehensive revision of the African Development Bank’s two procurement policy documents, namely, the “Rules and Procedures for Procurement of Goods and Works” and the “Rules and Procedures for the Use of Consultants” was recognized over the last few years. Though the Bank’s existing procurement policy, as outlined in these two Rules, had served the Bank, regional member countries and bidder communities well in the past years, recent trends underscored the need for a more dynamic policy and procedures that fully support development effectiveness within an acceptable fiduciary compliance framework. Such trends included the changing circumstances of the Bank’s regional member countries, which required the Bank to support an increasingly complex set of development objectives and several external emerging factors that had a significant impact on the application of its operations procurement policy.

The key feature of the new framework is the achievement of value for money by borrowers based on a dynamic and differentiated fit-for-purpose approach to procurement transactions. This includes the full use of Borrower Procurement Systems for certain contracts, customized methods and procedures for more complex ones and third-party systems in other cases. To achieve this, the framework adopts a risk-based engagement with borrowers in which the procurement arrangements incorporated into a Bank-financed project and the accompanying Bank levels of fiduciary oversight depend on the quality and performance of the procurement system and the complexity of the procurement transactions. This dynamic approach, will further strengthen the Bank’s position in deepening its support for capacity development to its regional member countries and at the same time fulfill such international commitments as the Paris Declaration and its follow-on decisions.

“The impact of this new framework is expected to be significant,” said Vinay Sharma, Director of the Bank’s Procurement and Fiduciary Services Department. “We have estimated that this will lead to projects being completed about eight months faster, resulting in over $200 million in economic benefits annually. Country ownership will increase and we will have much greater legitimacy working with borrowers in the improvement of their governance systems.

“With a large number of contracts being handled through the use of borrower systems, a sector capacity will be unleashed to handle complex transactions and provide better advice to the countries. Differentiated procedures will especially help countries in transition. The focus on socio-economic objectives (including gender issues) will satisfy legitimate aspirations of the countries. The framework will allow for much more flexible co-financing arrangements with other donors. Use of technology in Africa in public procurement will also increase, leading to more transparent, effective and efficient use of resources. All in all, this will position the Bank to be the partner of choice for borrowers on the continent.”