In a bid to gather suggestions and stakeholder views towards transforming the government goods procurement and assets disposal dealings, the PPADB commenced a series of workshops to gather exchanges aimed at improving efficiency and service delivery in the procurement sector.
When delivering a key note address at a workshop held in Gaborone recently, the Minister of Finance & Economic Development, Kenneth Matambo told procurement stakeholders from Botswana, Mauritius and Kenya that transparency and constant evaluation should be the core main values of strategic operations by procurement entities.
“I would like to urge procuring entities to take their responsibility and mandate seriously, fast tracked service delivery, openness and diligence should govern the daily proceedings of an economic segment of this magnitude,” said Matambo. According to Matambo, Public Procurement & Asserts Disposal Board (PPADB) handles very sensitive matters that have the potential of crushing the national economy if not handled with utmost professional ethics and etiquettes.
“A procuring entity that is well resourced, transparent, evaluates and introspects is procedures and organizational operations from time to time will output a procurement system that inspires public confidence and delivers its government policy objective,” observed Matambo. PPADB Executive Chairman, Bridget John noted that for her organization to proceed with the times they will have to tap into the ICT and digital era of service delivery.
“We have to move into digital procurement systems and we have to capacitate our staff and educate the public about the transformation,” she said. According to John, the move will reduce issues of vulnerability to corruption and will help PPADB to respond to tender queries within a short turnaround time as well as improve public confidence in their service delivery.
PPADB TO OUTSOURCE SOME OF ITS ROLES
Bridget John also noted that discussions from the workshop and others conducted before suggests that the organization is overstretched by holding a monopoly of procurement and tender awarding. “A frequent discussion from these exchanges informs us that we might actually be overstretched and this could also be tantamount to conflict of interest,” she said.
John explained that PPADB vet ITTs, awards the tenders, processes complaints and monitors adherence to the procurement & asserts disposal act, among other duties. John said stakeholders are of the view that the approach is outdated when compared to international procurement operational setup.
“We are currently assessing if we should outsource some of the roles, dismantle our mandate threshold as the Board or should we continue having PPADB awarding high value tenders, these are some of the key issues in these discussions.” She further said the procurement system review entails determining if there were any other government departments, organizations who can do some of PPADB roles better. The workshop also gave a platform to procurement entities from Mauritius and Kenya to share their views on procurement dealings back in their economies.
Maurice Juma from Kenya observed that in Kenya there was an emphasis on Small Medium Enterprises in their procurement frameworks. “We also encourage disabled people, woman and young people and also give them 30 % preference,” he said. He said this augmented government efforts of inclusive economic participation and wealth creation.
Sacheedanand Tachalooa from Mauritius told attendants that the procurement sector represents the engine of economic and wealth creation web. “We only have 7 % unemployment in Mauritius thus we believe that a proper procurement system can help us curb out this figure and we have a law that provides for preferential tender warding to companies who demonstrates over 80 % citizen engagement in its employment plan clearly stated in its bidding documents,” he explained
The public procurement & asset disposal act which was long enacted into a law in 2001 will be discussed for a possible review in July this year during the winter parliament session and the PPADB is expected to present a position paper on their findings from these workshops.
The review is expected to provide for amendments such as publishing procurement policies, advanced publication of procurement plans, advertisement of tender notices, disclosure of evaluation criteria in solicitation documents, publication of contract awards and prices paid, establishing appropriate and timely complaint mechanisms, implementing financial and conflict of interest, disclosure requirements for public procurement officials and publishing supplier sanction lists.
According to Bridget John procurement, system reviewing seeks to make transparency and accountability recognized as key conditions for promoting integrity thus preventing corruption in public procurement. The PPADB has also introduced the whistle blowing policy, which is viewed as key in public procurement to enable stakeholders to be able to report matters relating to improper, unethical and inappropriate conduct in tendering and might also be outsourced to a completely independent organization within the proposed procurement setup after review.
Established 16 years ago, the PPADB which operates as a parastatal under the Ministry of Finance and Economic Development is mandated with adjudicating and awarding tenders for Central Government and any other institutions specified under the Act for the delivery of works, services and supplies related services.
This is coupled with the registration and grading of contractors who so wish to do business with government. The Executive Chairperson heads the Board, assisted by three full time Executive Directors namely for the division of; Works, Services and Supplies, an organizational structure that might realize remodeling and management rearrangement once the procurement act is reviewed.
This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.
The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.
Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.
He was speaking in Parliament on Tuesday delivering Parliament’s Finance Committee report after assessing a motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.
Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.
The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.
The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.
The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.
This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.
Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.
Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.
However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.
Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.
When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.
This as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.
Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.
The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.
Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.
In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.
Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.
Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.
Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.
Acknowledging the need to draw down from GIA no more, current Minister of Finance Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”
He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”