Zimpapers Logo

Tapfumanei D Java

Correspondent

The National Development Strategy 1 (NDS1) 2021-2025 is the new strategic blueprint for Zimbabwe taking the country from the Transitional Stabilisation Plan (TSP) 2018-2020.

This article will review the TSP in the Public Procurement perspective before providing a synopsis of the NDS1 in promoting public procurement in Zimbabwe.

The review will be based on the highlights from the TSP blueprint, the major achievements and drawbacks in the context of public procurement, while the NDS1 analysis will mainly expose how public procurement is a tool to achieve socio-economic development and attainment of Vision 2030.

The Transitional Stabilisation Plan 2018-2020

The main highlights of the TSP were to stabilise the economic environment through various measures which were meant to curtail spiralling inflation and the general economic decline experienced at the time. The socio-economic environment had a huge bearing on the activities of all participants in the environment.

TSP Public Procurement

Highlights

Eradication of Corruption

Capacity building of procuring entities.

Professionalisation of public procurement.

Procurement and implementation of an electronic Government (e-GP) system.

Integration of public procurement with the Public Finance Management Act.

The TSP major successes in promoting public procurement was the eradication of procurement corruption, though this is not a once off exercise, the government should be applauded for walking the talk.

Of notable achievements were the signing of the MOU between Procurement Regulatory Authority of Zimbabwe (PRAZ) and the Zimbabwe Anti-Corruption Commission.

The handling of procurement induced corruption scandals through the courts and subsequent dismissals of top level government officials were all positives achieved by the TSP in eradicating procurement corruption.

PRAZ has since signed another MOU with Transparency International Zimbabwe (TIZ) to further buttress the government’s commitment to weed out public procurement corruption and promote transparency in public procurement.

Capacity Building of

Procuring Entities

The TSP recognised the need to promote the growth of the public procurement function through capacity building as witnessed by the massive rollout of training sessions and workshops by the capacity building division of PRAZ.

The objective of the TSP was to capacitate public procuring entities to “effectively manage the paradigm shift from the State Procurement Board regime to the Procurement Regulatory Authority of Zimbabwe era”.

The training sessions included sensitisation of the public procurement practitioners, everyone involved in public procurement, including the bidding community, while special sector specific trainings were also conducted.

The capacity building remains one of the major achievements of the TSP mandates under public procurement.

Professionalisation of the Public Procurement function

Major strides have been made in the professionalisation of the procurement function despite the delay in the publication of the regulations to govern the profession and subsequent launch of the proposed professional body, the Zimbabwe Institute of Procurement and Supply (ZIPS).

The public procurement function is now recognised in all most all the 345 public entities regulated by PRAZ.

The requirements of the PPDPA Act and enforcement by the regulator PRAZ has forced more than 80 percent of entities to comply with establishment of the procurement management units manned by qualified personnel while being headed by the accounting officer.

The realisation of the importance of the procurement function saw even the central government leading by elevating the function to the strategic level through appointments of procurement directors in the civil service.

If procurement professionals have anything to thank the TSP for, it is the professionalisation of the procurement function.

Government is reportedly to have appointed a Chief Procurement Director in the Office of the President and Cabinet OPC to bridge the gap between the monitoring functions of the regulator (PRAZ) and the major shareholder in State entities. Procurement and implementation of an electronic Government Procurement (e-GP) system.

The implementation of the electronic government procurement system e-GP was met with many hurdles emanating from the lack of funding though bidders can now register and be approved on the online PRAZ platform.

The various electronic monitoring tools have also been developed by PRAZ as part of modernising public procurement. There is, however, more to be done to fully implement electronic government procurement to allow for submission of tenders online as this will alleviate collusion by bidders, as well as corrupt practices that have tainted the public procurement landscape in Zimbabwe.

Integration of public procurement with the Public Finance Management Act.

The success of every government lies in the delivery of services in the confines of sustainable fiscal framework, hence the need for management of public funds through strict public financial management systems from the budgeting, procurement and financial control.

The TSP sought to ensure the harmonisation of the Public Finance Management Act (PFMA) and the Public Procurement and Disposal of Public Assets Act (PPDPA), which has been the missing link and this has also been reported by the World Bank as a challenge in most developing nations where public procurement accounts to 70 percent of public expenditure.

The TSP thus promoted the integration of the public procurement and public finance management act through procurement planning where procurement plans (Annual and Individual) were being drawn from the entities’ budgets. The procurement plans were then approved by the regulator, while also being used to categorise entities according to annual spend and risk profile.

Procuring entities have been religiously following the plans, but the previous year’s inflation, Cyclone Idai and the Covid-19 pandemic disturbed the integration significantly.

The integration of the two very important pieces of legislation goes beyond procurement plans, but achievement of the public procurement objectives, specifically value for money.

The TSP was a major blueprint in setting the pace for achievement of the socio-economic objectives of the country through public procurement as enshrined in section 315 of the constitution.

The attainment of Vision 2030 can only be done from a firm foundation of strong public institutions free from corruption and promoting the operating environment to allow business to grow, hence the National Development Strategy 1 was launched.

While the TSP was a precursor to the National Development Strategy 1, it had its own achievements and setbacks as far as promoting the public procurement function was concerned.

The National Development Strategy 1 was thus launched to propel the country towards vision 2030 towards a middle income country.

The National Development Strategy 1

The NDS 1 launched by the government in November 2020 contains “strategies, programmes and projects aimed at eradicating poverty and promoting sustainable livelihoods of the poor, women and youths empowerment and support to people living with disabilities, in line with Vision 2030”.

The objectives of the NDS1 are to:

Strengthen macroeconomic stability, characterised by low and stable inflation, as well as exchange rate stability;

Achieve and sustain inclusive and equitable Real GDP growth;

Promoting new enterprise development, employment and job creation;

Strengthen Social Infrastructure and Social Safety nets;

Ensure sustainable environmental protection and resilience;

Promote Good Governance and Corporate Social investment; and

To modernise the economy through use of ICT and digital technology.

The National Development Strategy 1 is a broad strategic plan to address socio-economic objectives in Zimbabwe through the employment of the Integrated Results Based Management (IRBM) system, which indoctrinates a culture of high performance, quality service delivery, measurement, goal clarity, continuous improvement and accountability across the public sector.

The successful implementation of the NDS1 requires the public sector overhaul which broadly addresses the individualism and silo mentality, while building collective accountability. In this regard, Government will upscale the change management strategy and fully implement the Whole of Government Approach.

What areas of Public Procurement are addressed by the NDS1?

Strict Adherence to the PFMA and PPDPA Acts

The TSP, a predecessor economic blueprint to the NDS1 set the pace for the integration of the PFMA and the PPDPA. While the TSP only focused on the harmonisation of the two Acts, the NDS1 calls for strict adherence to the provisions of the important legislations even advocating for punitive measures for entities that overrun their budgets.

The sanctions and penalties outlined in the NDS1 strategic blueprint seek to address the perennial budget overruns by public entities who blatantly ignore their budget limits through unplanned expenditures.

The NDS 1 proposes a price differential ceiling of five percent across procuring entities as part of the efforts to contain huge price differences by entities regulated through the same Acts.

The government through the Treasury Circular number 8 of 2020, imposed a moratorium on the purchase of vehicles to curtail the “incidences of arbitrage” which threatened the objective of value for money.

1. Domestic preference in public procurement

The NDS1 envisions the development and improvement of the performance of local Pharmaceutical Value Chain through promoting the procurement of locally produced medicines bolstered by the full implementation of the “Sector Development Strategy for Pharmaceutical Manufacturing in Zimbabwe 2017-2022”.

The strategy incorporates monitoring the sourcing of locally manufactured medicines through the use of electronic logistics management information systems.

The Public Procurement and Disposal of Public Assets Act already supports domestic preference under section 29 of the PPDPA Act, but its operationalisation, monitoring has not been religiously done.

The government has already issued a circular 12 of 2020 for procurement of utility vehicles to promote local vehicle manufacturing companies, but it remains to be seen whether the enforcement and implementation will clearly be followed.

The circular could be one of the measures to promote local vehicle manufacturing like the utilisation of idle capacity for the production of cost effective delivery truck and buses.

III. Enhance participation of SMEs in public procurement.

The Finscope 2012 reported that there were more than 2,8 million SMEs operating in Zimbabwe with over 18 500 which had formalised their operations with tax authorities.

The COVID-19 pandemic affected the economy and SMEs were not spared due to the lockdown restrictions, hence in the absence of stimulus/relief packages to sustain the SMEs public procurement can be a tool to bridge the gap.

While it is a noble policy framework to enhance participation of SMEs in public procurement, the government and other agencies which support SMEs have a torrid time ahead to operationalise.

For example, PRAZ has not yet put in place any measures to monitor the compliance of procuring entities promotion of SMEs participation.

Quotas must be put in place reserved only for SMEs and the policy should be very clear, demanding returns from the procuring entities showing what percentage of their procurement expenditure was awarded to SMEs.

The SMEs Association of Zimbabwe (SMEAS) has done a tremendous job to assist SMEs to formalise their operations and capacitating them to participate in public procurement.

1. Capacity Building

The NDS 1 advocates for improved skills availability across the country, including public sector professionals, industry and commerce.

The skills development through various capacity building programmes includes specialist skills training and development, culture sports and recreation, graduate traineeship, accountants and public sector procurement professionals.

The Public Procurement regulator PRAZ embarked on massive training during the first two-year transitional period under the TPS, but there are still some gaps judging by the quality of returns produced by the bulk of procuring entities.

The 2018 National Skills Audit Report unearthed shocking results of the skills deficit of 61.75 percent calling for the authorities’ urgent attention to address the critical skills shortage.

Public Procurement professionals have not been in short supply, with almost every university, polytechnic and private colleges, including international bodies churning out graduates who further need interment in the application of the public procurement and disposal of public assets Act.

1. Strengthening enforcement of procurement legislation through PRAZ.

The enforcement of procurement legislation in the public procurement landscape is needed than ever before after the extended transitional period which ended on 31 December 2020.

The COVID-19 pandemic exposed procurement risks and challenges in public procurement, with the high profile cases of Natpharm and the former Minister of Health and Child Care, Obadiah Moyo, grabbing the limelight in 2020.

The TSP outlined various measures from the PPDPA Act to deal with governance issues in public procurement, from the offences and penalties for offenders.

Corruption cases were not only peculiar in Zimbabwe, but worldwide as the pandemic presented offenders with opportunities to exploit the procurement systems while hiding behind emergency procurement and relaxed laws.

The NDS1 seeks to address governance issues in public procurement through the enforcement of the provisions of the law to bring offenders to book.

The enforcement of the public procurement laws through the monitoring and evaluation regulations will clean the public procurement and help reduce corrupt practices by procuring entities.

In conclusion, NDS1 has a clear mandate to improve Public Procurement, but it requires increased commitment from the government, stakeholder buy-in and a thorough monitoring to ensure compliance.

Public procurement is a powerful tool to address the historical imbalances for example gender issues, the government can deliberately instruct procuring entities to do gender mainstreaming in public procurement to actively encourage women to participate in public tenders.

In addition to the public procurement, professionals must always be reminded of their role in national development and what public procurement can do to address the socio-economic objectives of the country while helping achieve Vision 2030.

• Tapfumanei D. Java is a public procurement consultant at Thirty-Four Consultancy (MSc Supply Chain, SAPICS, Internal Control Institute, CIPS, IAPHL, IRMSA) [email protected] +263772512591