Business News of 2014-05-19

Public procurement must be sector-specific

Certain public procurements must be ceded to specific sectors of the economy to drive local enterprises, Mr. Sebastian J. Ackotia, Director of Policy and Strategy at the Public Procurement Authority (PPA), has said.

This, he said, can be achieved by establishing a margin of preference -- otherwise called a set-aside -- whereby tenders for certain public contracts will be ceded to specific sector-actors of the economy, most significantly women entrepreneurs and small- and medium-sized enterprises.

“It is a known fact that the development of any economy depends largely on its ability to sustain and grow micro-enterprises. We also cannot downplay the significant role of women in socio-economic advancement when given the needed push.

“There can be a deliberate policy to incentivise small- and medium-sized enterprises as well as encourage women entrepreneurs to do business with government. This is because when a woman is empowered, the economic effect trickles from her household and spins off into society.”

Mr. Ackotia was speaking at an awareness seminar on sustainable public procurement for suppliers in Accra.

Public procurement is the process by which government departments or agencies purchase goods and services from the private sector. It takes place at both national and regional levels, and the process is usually subject to specific rules and policies covering how the relevant decisions are made.

The law governing procurement in Ghana, Act 663, was enacted to harmonise the processes of public procurement in the public service as well as secure judicious, economic and efficient use of state resources -- that is, procuring at the right price and quantity from the right supplier.

The law is also to ensure that public procurement is done equitably in a fair, transparent and non-discriminatory manner.

In his State-of-the-Nation address to Parliament in February, President John Mahama said he has asked for a review of the public procurement legislation to give priority to contractors and suppliers that buy most of their inputs in the local economy, in a bid to increase indigenous private sector business opportunities and expand job-creation.

The President also believes this policy will curb the country’s imports -- and contain a bulging international trade deficit -- as it favours the development of local capacity to produce various goods and services.

As it pushes to modernise its practices, the PPA has introduced the concept of Sustainable Public Procurement (SPP) as part of efforts to develop a world-class public procurement system that conforms to international best practices.

The programme, which is being implemented with the support of the Swiss State Secretariat for Economic Affairs (SECO) through a US$2.7million grant signed in 2010, advocates for responsible procurement of public goods to avoid negative environmental, social and economic consequences.

Mr. Ackotia said sustainable public procurement can help promote economic growth. “Sustainable public procurement is all about value for money. It ensures that when you use public funds or taxpayers’ money to procure items, you procure them in a manner that you don’t pay out more than is required.

“In that case, you don’t waste public funds and there is adequate protection of the taxpayers’ money.”

Source: B&FT
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