adminFungai Mgcini Kuzinya
The Public Procurement and Disposal of Public Assets Act (PPDA) came into operation on January 1, 2018.
This piece of legislation governs the manner Government buys and sells goods and services in order to serve us the citizens.
The goods and services purchased by the Government range from the simple pen, paper, and floor polish to the important medical supplies and complicated military hardware used by the defence forces as well as the IT systems the Zimbabwe Revenue Authority and the Civil Aviation Authority use. Every time the Government, local authority or parastatal purchase or sell anything the PPDPA comes into operation.
It is arguably the most important piece of legislation that regulates economic activity in Zimbabwe.
The PPDA has marshalled important prospects for the country. Very important Government policies have been turned in legal provisions. Legal effect has been given to the devolution of economic activity, job creation and the eradication of corruption in Government spending.
The PPDA ensures that the Government walks the talk and does not simply pay lip service to these high level policy considerations.
Local authorities, rural councils, Government ministries, parastatals and all entities the Government has a controlling interest, known in procurement terms as procuring entities, have been given the power to set up procurement committees, design their own procurement plans and interact directly with potential suppliers of goods and services. It is, however, important to note that these bodies can only so do if they have sufficient skills.
This is stark shift from the previous administrations approach. Prior to the PPDA coming into force, the State Procurement Board performed these functions on behalf of these entities and government.
Under the current administration the Procurement Regulatory Authority of Zimbabwe is to a significant extent merely a regulator.
The knock on effect is that an opportunity has been created for all those that have the necessary skill set to find employment in these organisations. The power to determine the level of economic activity and growth through buying, selling and job creation has been spread to the grassroots.
The new Act promotes transparency. In the previous Government contracts regime, such a requirement was non-existent. Procurement was shrouded in secrecy.
There was no legal obligation for the Government to act in a transparent manner. The PPDA completely changes that. Now, any member of the public has the right to approach any Government entity and request information on any Government contract.
Members of the public are allowed to access the description of the procurement contract, the bid prices (the losing one’s as well), the evaluation processes, the contract performance evaluation guidelines and any other relevant information. This transparency is not absolute.
There are circumstances where it is justified to withhold certain information. I doubt that access to information will be readily granted in matters that involve national security such as military consultation and arsenal acquisition.
The net effect is that the sun has set on the days of the all powerful arrogant procurement officer.
The power to scrutinise, criticise and cry wolf when clandestine corrupt Government contracts are entered into has been given to the people. The establishment of a robust civil society that will monitor government procurement will be a step in right direction. It will ensure that transparency carries the day.
That being said, the PPDA is not perfect. Nothing in this world is. It does have some short comings. These can be illustrated by comparing it to other procurement laws found across the African continent. I will use examples of Nigeria and Kenya. These two countries have through their procurement laws, addressed important issues that are common in the economies of African countries.
Let us start with Nigeria. Nigeria gives preferential treatment to local suppliers and goods. Zimbabwe does provide for preferences as well. The difference is that Nigeria clearly specifies what preferences should be given. The Zimbabwean law falls short in that regard. Our law does state that preference shall be given in terms of the Indigenisation and Economic Empowerment Act, women suppliers or subcontractors and for intellectual property developed in Zimbabwe.
This is a far cry from the Nigerian provisions that specifically state that a margin of preference of up to 15 percent is granted to goods produced domestically from domestic suppliers and up to 7,5 percent for works by domestic contractors.
Another preference given at the stage a contract is awarded by Nigeria is up to 10 points out of a total of 100 for the inclusion of domestic consultants in consulting assignments carried out by international consultants. An important condition is imposed, that is the margin of preference will only be applied if it is not disadvantageous to the bid in terms of price. This protects Nigerian citizens from aggressive international competition for Government contracts.
There is no doubt that competitive bidding ought to be carried out at an international level. It invariably enhances competition and lowers the cost of acquiring goods and services whilst ensuring the acquisition of high quality products. It is important for every economy.
Explicitly mentioning preferences allowed, reduces the risk of shady contracts being awarded to acquaintances. It also provides potential bidders with greater clarity on what is expected from them. At the present moment, too much discretion is given to the individual procuring units to determine on an ad hoc basis what preferences are to be given.
Kenya procures with a clear intention of developing its local industry. They also ensure the participation of disadvantaged groups in the Government contracts system.
In order to achieve the former, a guarantee is provided to local contractors that offer select goods that are manufactured, assembled or produced in Kenya. These local manufacturers are assured of supplying the Government with these goods after competitive bidding takes place. Kenya also assures its citizens that purchases that are wholly funded by the Government as long as they are below a certain price, will be reserved for local producers and suppliers.
The Kenyan government also states that, 30 percent of all budget allocations that are funded by the government for procurement purposes will be reserved for disadvantaged groups.
Disadvantaged groups are identified as persons who are known to be denied by mainstream society access to resources and tools that are useful for their survival in a way that disadvantages them or individuals who have been subjected to prejudice or cultural bias because of their identities as members of groups or categories of persons without regard to their individual qualities, and includes enterprises in which a majority of the members or shareholders are youth, women and persons living with a disability.
There is clarity and certainly in these laws.
Despite the absence of clearly articulated and well developed secondary objectives, the PPDA is a major development in our economic system. It opens up our economy to international participation.
This allows for the acquisition of higher quality of goods and services for a lower price. There is cursory mention to domestic preferences in the PPDA but it does not go far enough to ensure the integrity of the procurement processes. The preferences also fall short of clearly indicating an intention to develop the local industry as in Kenyans case.
The opportunity to address these shortcomings is not altogether lost. The Procurement Regulatory Authority of Zimbabwe is empowered to give guidelines and pass secondary legislation. I have no doubt in my mind that these issues will be addressed.
Adv Fungai Mgcini Kuzinya LLB LLM is a regional commercial lawyer. He is an Advocate of the High Courts of Zimbabwe, South Africa and Lesotho. He holds chambers at The Chambers in Harare. He can be reached at [email protected]
Online Reporter