Public procurement carries potential to create jobs � Experts
Isaac Pinielo | Friday March 3, 2017 15:48
Economic experts and top government officials, who participated at a recent panel discussion were of the view that public procurement is inherently inefficient and hence more needs to be done to make it efficient.
The panel discussion, organised by the University of Botswana (UB) Faculty of Business, was focused on employment creation through public procurement during the 2017/18 national budget.
It was suggested that for public procurement to have any meaningful contribution to economic diversification and job creation, the approach should change to public sector supply chain management. That way, the experts said, linkages are clearer and opportunities for value creation are easily picked.
Setting the tone, UB senior lecturer for logistics and supply chain management, Thuso Mphela noted that discriminatory procurement policies of governments lead to market failure due to inefficient distribution of resources and loss of benefits of open competition.
“One of the critical components of public procurement is inclusion, to ensure that everyone capable of participating should be allowed to participate,” he said.
According to Mphela, government is seeking to diversify the economy while issues like value addition are not provided for.
“For example, we don’t have a definition of a local product; does it mean raw materials should be coming from within the country or just manufactured in the country despite the origin of raw materials?” he queried. He said this is key in determining the extent of activity in the country which by extension determines the number of jobs that can be created. Mphela further mentioned what he termed “politics of procurement”, stating that politics has a huge bearing on the amount and places of expenditure affecting budget efficiency.
He said there is also growing concern that politicians and their friends are rather benefiting more from public procurement than other groups.
“This reduces the confidence on the public procurement machinery,” he said.
In view of the challenges that the country faces as a developing economy, more specifically a low enterprising culture, Mphela said a lot of work is needed in creating the culture and supporting start-ups and small, medium and micro-sized enterprises (SMMEs) to be sustainable.
“In the current budget, key drivers include infrastructure development. This is an area where we can see a lot of sub-contracting and public-private partnerships (PPPs) in operation to build local capacity,” Mphela said.
For manufacturers like pharmaceutical companies, the lecturer said government can guarantee a certain level or portion of uptake of production that can sustain these businesses.
He said otherwise exposing them to competition at infancy may just crowd them out of the market.
Ambassador of the European Union (EU) to Botswana and SADC, Alexander Baum said it is worthwhile to make an extra effort to ensuring that public procurement and public spending is done in the best way possible, so that it can be a generator of economic growth.
He said given the sheer size of the public budgets, procurement should be done in a way that it benefits the economy and society at large.
“Transparent, fair and competitive public procurement generates business opportunities, drives economic growth and creates jobs,” said Baum.
On the other hand, the chairperson of the Botswana Chartered Institute of Procurement and Supply (BCIPS), Amochilani Kgabo highlighted the need to strengthen the existing structures in procurement to promote corporate governance.
“By strengthening corporate governance, this will yield more return on investment in both public and private sectors,” she said.
Kgabo noted that this will increase ethical recruiting or employing right people for the right jobs, expansion of the tax base, aggregate productivity, drive innovation and create new jobs.
She said corporate governance advocates for more and enhanced project management and implementation, which articulate to major projects completed on time and on budget, quantity service provision and thereby realising value for money and increased profit margins which stimulate economic growth.
Kgabo further indicated that professional bodies such as BCIPS are calling for qualified personnel handling the procurement function to exhibit a high procurement knowledge and skills that will assist Botswana in achieving and delivering the 2017/18 budget goals and objectives.
“I urge both the private sector and the public sector to abide by the international procurement code of conduct, ethics, regulations to achieve the 2017/18 budget deliverables”.
She said government, through the Act of Parliament, should establish the professional body regulating the affairs of procurement profession, entrusted with the responsibility to register professional procurement personnel, develop and guide the entire procurement cycle.
This she said will promote ethical sourcing which results in political, socio and economic development hence improving procurement competencies and skills.
Grace Ntereke, deputy coordinator in the public finance management reform of the Ministry of Finance and Economic Development said the budget can create employment if the market stops overcharging the government.
She decried maintenance costs which she said limit service delivery.
“If quality is not compromised budget will increase. We also need research on procurement,” she said.