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Bid-rigging defines corruption in Public Procurement

PPADB wants parastatals to follow its procurement procedures: PPADB Executive Director, Bridget Poppy John

Parastatals and other quasi-government institutions have been urged to exercise due diligence in public procurement so that government as the biggest buyer of goods and services in the economy gets the most reasonable and competitive fair price.


Legal Counsel at Competition Authority (CA), Kesego Modongo, told attendants at a workshop organised by Public Procurement and Assets Disposal (PPADB) that it is crucial to have vigorous competition among suppliers since it helps government to obtain the best value for money for the goods and services they procure.


He asserted that when competition is curtailed taxpayers’ money is wasted as governments pay more than a fair price. Modongo defined bid rigging as fraud and conspiracy against society since it is costly to the society.


Briefing the attendants, who formed part of their respective institutions’ Tender Committees Modongo explained that bid rigging occurs when bidders agree among themselves to eliminate competition in the procurement process, thereby denying the public a fair price.


He said in the past, the CA registered a number of cases relating to bid-rigging and warned that proper detection is needed in order to curb this kind of mischief in public procurement.


Modongo stated that bidders can eliminate competition in public procurement in many simple ways like by agreeing to submit a non-competitive bid that is too high to be accepted or contains terms that are unacceptable to the buyer, or in some instances competitors agreeing not to bid.


According to him, in some instances some companies chose to withdraw a bid from consideration or agree to submit bids only in certain geographic areas or only to certain public organizations.


The legal Counsel also noted that although the schemes used by firms to rig bids vary; the intention is to eliminate competition so that prices are higher and the government pays more.


However, he said finding signs of possible bid rigging do not necessarily mean that bid rigging is occurring; it simply shows that there may be a problem. In this instance, the best thing for procurement officials to do is to contact the CA to investigate the signs detected.


Parastatals were also implored to review the bidding process and the bids carefully, looking for any additional signs of possible bid rigging. And to achieve that, procuring entities were advised not tell any of the bidders about their concerns, as this may result in the destruction of evidence. Instead the procuring entity should make sure that detailed notes, records and documents are kept safe.


Procuring entities were further urged to be careful when dealing with a small number of bidders since the probability of bid rigging is higher if there are a few bidders. Attendants were told bid rigging requires bidders to reach an agreement that eliminates competition.


Modongo said Tender Committees should not be out-smarted by bidders as procurement is very important to the development of any economy, particularly a developing one like Botswana.


The Tender Committees were also implored to devise a mechanism of monitoring whether the bidders have had the opportunity to communicate with each other, and look for any relationships among the bidders after the successful bid is announced.


Examples of bid rigging investigated by CA in the past include the Security Tender Case in which the bidders were found to be having identical telephone contacts, the Sugar Beans Case, and the Infant Formula Milk Case.


Directorate on Corruption and Economic Crime (DCEC) official, Oreemetse Dipatane said corruption remains a concern in Botswana’s economy and public procurement is one area where corruption is rife.


Part of the problem, as observed by Dipatane is poor service delivery as citizens may elect to use bribery to receive favour in terms of service offering. In leadership positions, corruption is motivated by greed and the power of influence in decision making.


PPADB Divisional Manager-Works, Dudu Thebe advised parastatals Tender Committees against “exclusive rights” bidding where the procuring entity specifies the type of the brand they want in the Invitation To Tender (ITT) documents since this would automatically eliminate a number of competitors.


Parastatals were also advised to implement government policies in their procurement to ensure that locals are especially small business and those in the informal sector benefit from the public procurement.


The Local Procurement Scheme (LPS) dictates that preference be introduced in tenders falling within the financial threshold of the District Administration Tenders (DATCs), currently at P2 million to P4.5 million.


The purpose of the scheme is to empower the disadvantaged groups, namely, the youth, people with disabilities, women and rural suppliers through public procurement preferential treatment.


The PPADB Act gives procuring entities to purchase or get services from suppliers for the services with a value less than P30 000. Thebe however advised them to have a list of suppliers in their data base and also implored them to make an effort to engage different service or goods providers.


However, what has proved to be a concern across all parastatals is that, quasi-government institutions are faced by a problem of lack of adequate knowledge and technical skills relating to procurement.


PPADB has been engaging different stakeholders in capacity building workshops in an effort to instil integrity in public procurement. Last year, PPADB engaged all government ministries Tender Committees in a similar workshop.


PPADB, DCEC and CA officially launched a Memorandum of Understanding (MoU) in which they will cooperate against bid rigging and collusive tendering in 2011.


According to the OECD, of all government activities, public procurement is considered one of the most vulnerable to fraud and corruption. Therefore government policies and procedures in public procurement remain integral as weak governance in public procurement hinders market competition and raises the price paid by the administration for goods and services, directly impacting public expenditures and therefore taxpayers’ resources.


Corruption has severe impacts in developing countries like Botswana where public procurement accounts to more than 70 percent of the Gross Domestic Product (GDP).

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Over 2 000 civil servants interdicted

6th December 2022

Over 2,000 civil servants in the public sector have been interdicted for a variety of reasons, the majority of which are criminal in nature.

According to reports, some officers have been under interdiction for more than two years because such matters are still being investigated. Information reaching WeekendPost shows that local government, particularly councils, has the highest number of suspended officers.

In its annual report, the Directorate on Corruption and Economic Crime (DCEC) revealed that councils lead in corrupt activities throughout the country, and dozens of council employees are being investigated for alleged corrupt activities. It is also reported that disciplined forces, including the Botswana Defence Force (BDF), police, and prisons, and the Directorate of Intelligence and Security (DIS) have suspended a significant number of officers.

The Ministry of Education and Skills Development has also recorded a good number of teachers who have implicated in love relationships with students, while some are accused of impregnating students both in primary and secondary school. Regional education officers have been tasked to investigate such matters and are believed to be far from completion as some students are dragging their feet in assisting the investigations to be completed.

This year, Mmadinare Senior Secondary reportedly had the highest number of pregnancies, especially among form five students who were later forcibly expelled from school. Responding to this publication’s queries, Permanent Secretary to the Office of the President Emma Peloetletse said, “as you might be aware, I am currently addressing public servants across the length and breadth of our beautiful republic. Due to your detailed enquiry, I am not able to respond within your schedule,” she said.

She said some of the issues raised need verification of facts, some are still under investigation while some are still before the courts of law.

Meanwhile, it is close to six months since the Police Commissioner Keabetwe Makgophe, Director General of the Directorate on Corruption and Economic Crime (DCEC) Tymon Katlholo and the Deputy Director of the DIS Tefo Kgothane were suspended from their official duties on various charges.

Efforts to solicit comment from trade unions were futile at the time of going to press.

Some suspended officers who opted for anonymity claimed that they have close to two years while on suspension. One stated that the investigations that led him to be suspended have not been completed.

“It is heartbreaking that at this time the investigations have not been completed,” he told WeekendPost, adding that “when a person is suspended, they get their salary fully without fail until the matter is resolved”.

Makgophe, Katlholo and Kgothane are the three most high-ranking government officials that are under interdiction.

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Masisi to dump Tsogwane?

28th November 2022

Botswana Democratic Party (BDP) and some senior government officials are abuzz with reports that President Mokgweetsi Masisi has requested his Vice President, Slumber Tsogwane not to contest the next general elections in 2024.

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African DFIs gear to combat climate change

25th November 2022

The impacts of climate change are increasing in frequency and intensity every year and this is forecast to continue for the foreseeable future. African CEOs in the Global South are finally coming to the party on how to tackle the crisis.

Following the completion of COP27 in Egypt recently, CEOs of Africa DFIs converged in Botswana for the CEO Forum of the Association of African Development Finance Institutions. One of the key themes was on green financing and building partnerships for resource mobilization in financing SDGs in Africa

A report; “Weathering the storm; African Development Banks response to Covid-19” presented shocking findings during the seminar. Among them; African DFI’s have proven to be financially resilient, and they are fast shifting to a green transition and it’s financing.

COO, CEDA, James Moribame highlighted that; “Everyone needs food, shelter and all basic needs in general, but climate change is putting the achievement of this at bay. “It is expensive for businesses to do business, for instance; it is much challenging for the agricultural sector due to climate change, and the risks have gone up. If a famer plants crops, they should be ready for any potential natural disaster which will cost them their hard work.”

According to Moribame, Start-up businesses will forever require help if there is no change.

“There is no doubt that the Russia- Ukraine war disrupted supply chains. SMMEs have felt the most impact as some start-up businesses acquire their materials internationally, therefore as inflation peaks, this means the exchange rate rises which makes commodities expensive and challenging for SMMEs to progress. Basically, the cost of doing business has gone up. Governments are no longer able to support DFI’s.”

Moribame shared remedies to the situation, noting that; “What we need is leadership that will be able to address this. CEOs should ensure companies operate within a framework of responsible lending. They also ought to scout for opportunities that would be attractive to investors, this include investors who are willing to put money into green financing. Botswana is a prime spot for green financing due to the great opportunity that lies in solar projects. ”

Technology has been hailed as the economy of the future and thus needs to be embraced to drive operational efficiency both internally and externally.

Executive Director, bank of Industry Nigeria, Simon Aranou mentioned that for investors to pump money to climate financing in Africa, African states need to be in alignment with global standards.

“Do what meets world standards if you want money from international investors. Have a strong risk management system. Also be a good borrower, if you have a loan, honour the obligation of paying it back because this will ensure countries have a clean financial record which will then pave way for easier lending of money in the future. African states cannot just be demanding for mitigation from rich countries. Financing needs infrastructure to complement it, you cannot be seating on billions of dollars without the necessary support systems to make it work for you. Domestic resource mobilisation is key. Use public money to mobilise private money.” He said.

For his part, the Minster of Minister of Entrepreneurship, Karabo Gare enunciated that, over the past three years, governments across the world have had to readjust their priorities as the world dealt with the effects and impact of the COVID 19 pandemic both to human life and economic prosperity.

“The role of DFIs, during this tough period, which is to support governments through countercyclical measures, including funding of COVID-19 related development projects, has become more important than ever before. However, with the increasingly limited resources from governments, DFIs are now expected to mobilise resources to meet the fiscal gaps and continue to meet their developmental mandates across the various affected sectors of their economies.” Said Gare.

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