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Former South African Minister Canvasses Adoption of Procurement Policy by African Countries
Former South African Minister of Public Enterprises, Alexander Erwin, says the adoption of procurement policy by African countries will enhance the much desired growth and development of the Continent.
Erwin, 61, who served as minister of public enterprises in his country between 2004 and 2008, told his audience, made up of African ministers, diplomats and delegates attending the annual meetings that the level of development achieved by most developed economies like the United Kingdom and United States was due mainly to the adoption of the procurement policy.
Procurement policy is included in the constitution of South Africa and anybody who infringes on the law on procurement goes to jail, Erwin told the audience.
Procurement policy can be applied at the local, provincial, state and enterprises levels of government and what is important is how it is manned.
Drawing from the experience of South Africa and its procurement policy, Erwin noted that though there could be differences in the application of the policy in South Africa and what the African Development Bank (AfDB) will be applying in its operations, the basic rules of fairness, transparency, cost effectiveness and competitive bidding are still applicable.
According to Erwin, the inclusion of the procurement policy in South Africa’s constitution is a kind of affirmative action since it is targeted at assisting companies owned by blacks in South Africa to grow.
When the new non-racial government came to power in 1994 under Nelson Mandela, it received a mandate to redress the wrongs of the past. And the black economic empowerment (BEE) procurement policy that governs the procurement of goods and services by the South African state was adopted and included in the constitution.
In the case of the AfDB, which is embarking on institutional reforms to strengthen its operations, the South African experience is useful and timely since procurement is on of the critical processes of the Bank’s lending to governments and enterprises.
The charter of the AfDB requires the institution to ensure that the resources meant for projects and programmes financed by it are used only for the purposes for which they are granted. The charter also requires that proper attention be paid to economy and efficiency in the procurement processes in Bank-funded projects.
Accordingly, the Bank prefers the most open competitive procedures for procurement of goods, works and services. Political and other non-economic influences or considerations must not influence procurement in Bank-financed projects.
The procurement procedures should give fair and equal opportunity to contractors, suppliers and consultants from member-countries of the Bank. Transparency is also essential in the procurement process.
But Erwin warns that frequent changes do not go down well with procurement policy since these changes could be resisted.
Referring to the South African experience, Erwin said that the decision of the South African government to extend telephone lines to blacks after a new government came into office in 1994 created some disruptions that resulted in low pace of development in the telecommunications for a long time.
Erwin said that competitive procurement policy was adopted by South Africa in 2005 for the country’s new power project, Harbour and the World Cup projects.
In this particular competitive procurement, the bidding was open to all African countries, Erwin said.
He, however, advised that it is preferable to use international agencies with requisite experience like the United Nations Industrial Development Organisation (UNIDO) in dealing with procurement policy.
Erwin expressed he hope that African countries would integrate procurement in their various development activities as failure to do so would harm their economies and retard their growth.