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Transform public procurement for effective economic governance

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Economic governance is meant to strengthen economic and budgetary coordination. Budgetary coordination is not complete without inclusion of procurement activities. Procurement in most economies is responsible for spending up to 60%–80% of the national budget.The only expenditure that does not come under the remits of procurement is salaries. In that regard, procurement plays a pivotal role in public finance management.

National budgets should be derived from procurement budgets. The disconnection between public finance management and public procurement is a cause for concern.

Control of economic activities is at its best when procurement is effectively involved. Procurement has the capacity to manage economic activities by appropriately sourcing national needs, scheduling procurement activities for proper utilisation of limited resources and monitoring of contracts for control of schedules and costs.

The state procurement board Act limits the procurement agent to the merely oversee the procurement process, inevitably creating a void in economic governance activities of budgeting, contract and project management. The procurement board should oversee the budget formation through use of procurement plans, budget utilisations through the procurement process and project performance through contract management. A disconnect between disbursements and the budget, contract management and project management were prevalent in the 2012 infrastructure report. Some projects were reported to be surrounded by contentious issues around project implementation, failure to utilise allocated resources and poor quality projects. Contract management issues were exposed on the construction of Manyame Bridge and maintenance of elevators at a number of Government buildings were it was reported that suppliers were paid, but were failing to perform. The scenarios had a bearing on quality, costs and project schedules.

Procurement activities are in three stages, pre-tender, tender and post tender. Studies revealed that the commonly regulated area of public procurement cycle is the midstream – the tender process. It has been proven in information technology that garbage input produce garbage output, therefore, garbage procurement plans or the lack of them produce garbage output from a well regulated procurement process as revealed by the performance of the budget in previous reviews. Economic governance weakness is therefore emanating from the desire to manage the tender award only disregarding the other critical elements of pre and post the tender processes that have significance in public finance management.

Public procurement needs a total transformation to facilitate total economic governance through appropriate regulation of the whole procurement cycle rather that limiting it to one element of the cycle of the tendering process. Public procurement management should be the pivot of public finance management insisting on procurement that is based on a procurement plan supported by an appropriate budget. This will result in projects that are initiated and completed, the situation of projects that fail to see the light of the day will be a thing of the past.

The strength of the procurement function is derived from the status core of an autonomous procurement function to enhance efficiency, accountability and responsibility and should be maintained. Procurement units in all procuring entities need to follow suite, they need to be divorced from the finance and administration function to achieve the same benefits mentioned earlier on. Above all, professionalism is required in the procurement activities to support economic governance. Personnel with procurement skills acquired from appropriate procurement training and qualification need to be employed in procurement departments.

Nyasha Chizu is a Fellow of the Chartered Institute of Procurement and Supply writing in his personal capacity. Feedback: chizunyasha@yahoo.com; nyashachizu@harleyreed.com

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