Kenya launches eProcurement system, looks to reduce corruption, improve value

Can an eProcurement system play a central role in preventing (maybe halting) government corruption? That’s what is going to be tested in Kenya over the next couple of years. That country has had a difficult time with corruption, including the Goldenberg scandal in the 1990s, which some think cost the country as much as 10% of its GDP for a couple of years or more.

Last week, Kenya officially launched their new national eProcurement system, with the President formally launching the initiative. (That’s impressive, consider if the Queen had launched the Crown Commercial Service in the UK)!

At the launch President Uhuru Kenyatta said use of the system would improve confidence in government spending, increase transparency and cut costs. It would also make Kenya a more attractive destination for inward investment.

“E-procurement will to a large extent assist in ensuring that public financial resources are used prudently and for the intended purposes,” he said. “Over the years, we have heard complaints from Kenyans that the government is being overcharged for goods and services that it purchases. By introducing transparency and accountability through e-procurement, we expect more or less to eliminate the abuse of our procurement system”.

There are high hopes for the system, with the hope that it will reduce corruption and fraud as well as driving better value. There is also an aim to support a goal that 30% of contracts should go to “the young, women and the disabled”.

The eProcurement system appears to be part of a wider financial management system, known as IFMIS (Integrated Financial Management Information System). In addition, there will be a ‘treasury single account’ (TSA), from which all payments will be processed in line with financial sector reforms including the 2012 Public Financial Management Act. So the functionality of the system appears to be quite broad, from advertising of opportunities through to payment –a true “source to pay” solution. Here’s the allAfrica website on the topic:

“Another notable function of the e-Procurement system is the Kenya Supplier portal that will allow suppliers to access the status of their purchase or service order issued and payments. This means all government suppliers must be duly registered with the Registrar of Companies and own a tax compliance certificate ...”

But we confess, we don’t know whether this is a home-grown and developed system or from a proprietary solution provider. Anyone able to enlighten us? It is also not clear how much real eSourcing capability is included – is it really just a postbox for bids and communication, or does it include in-system evaluation tools, e-Auction capability, etc?

In terms of corruption, there are several angles. Making sure bidders are properly registered and identified is a start. Open advertising of opportunities is another obvious counter-measure to favouritism and corruption. And the aspect of bidding electronically takes away the need for suppliers to visit government offices, which used to be an obvious opportunity for the handing over of bribes to officials!

So we wish Kenya well in their implementation, and we’ll follow progress with interest – this has obvious relevance in many other countries around the world too.

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