Law Urgently Needed On Use of Public Funds [opinion]

SUPPLY Chain Management (SCM) or procurement is a vast professional discipline, which has made global strides for a few decades now, but is generally unappreciated and seen as a “no value add” in most organisations, including the government.

This is despite an overwhelming percentage of funds spent on procurement as can be seen from the national budget for 201415. No doubt that big public funds spenders, although they are largely service providers such as defence, education and health would be involved in procurement of both goods and services. In fairness to the public sector, the Ministry of Finance sought to introduce a law on procurement, which unfortunatelyfortunately was withdrawn. It is worth mentioning that the bill was going to establish, among others, a central procurement board and methods to regulate buying by government ministries as well as state owned-enterprises, unless exempted by the Minister of Finance. The objectives of the act would have set the standards in terms of integrity, accountability and transparency. Some of the objectives of the act included enabling state support for locally produced goods and services as well as encouraging local entrepreneurial evolution.

The above-mentioned bill may have been necessary as in our opinion, the procurement staff in these organisations are generally not supported, nor are they given adequate training to circumvent fraud and corruption. Of course, in most cases it might be a matter of deliberate corrupt conduct by a mandated official. There are numerous ways that procurement fraud can be committed such as bid rigging, shell companies, collusion, false invoices for non-existing suppliers, unjustified single source awards, employees defrauding employers, etc.

In that regard, since Namibia is party to international anti-corruption mechanisms as well as a functional anti-corruption law being in place, corruption should have been less of a problem in Namibia.

The envisaged bill would have been somewhat comprehensive in that it would have set the standards in relation to competitive processes, monitor such while building capacity. With regard to willful corruption, the United Nations Office on Drugs and Crime provides a guide on public procurement. The latter calls for an effective public procurement system based on integrity, competition and transparency.

There is at least anecdotal evidence that the Namibian system is capable of dealing with deliberate corruption as can be seen from bidders seeking recourse from the courts and have orders in their favour. This is besides the existence of the Anti-Corruption Commission which is provided for in the Namibian Constitution, enabling the supposedly “impartial” body. Their impartiality of course depends on who is speaking, but the point is that there is legal provision to deal with corruption as opposed to lack of capacity to manage a process that builds public confidence. The severity of corruption is also not denied, but it is equally worth focusing on processes that strengthen procurement by government institutions.

However, even though the bill was withdrawn, some of the big spenders have already indicated their appetite for the status quo to remain. The Ministry of Defence for example reportedly attempted to source their chicken from elsewhere while everyone else is expected to buy local chicken to create jobs locally. This kind of decision would not only have violated several provisions of the envisaged law, including buying “Namibian”, but it certainly is counterproductive.

Why would a government ministry such as the Ministry of Trade and Industry make an infant industry protection policy only for such a policy to be undermined by another ministry at the expense of local entrepreneurs, jobs and consumers? It does not make sense, especially when you consider the fact that these are public funds and should be used consistently in line with public developmental policies.

The Minister of Finance would also have been flooded with requests for exemption by many if not most SOEs from this act contrary to the underlying intention of the act. However, many a times the Auditor General would issue damning reports about ministriesSOEs and parliament would not seek meaningful accountability from involved parties, particularly holding individuals accountable.

Therefore it made sense to direct spending of public funds more proactively. It’s time we expedite drafting policies, procedures, strategies and laws with the aim to end procurement fraud while actually enforcing such laws.

– Mvamono Monica Jagger is a procurement manager at Standard Bank Namibia and Michael Gaweseb is a consumer rights activist

Source : The Namibian