Open Contracting - The Next Generation of Procurement in Africa

The next generation of Africa’s development will require billions in investment to build infrastructure and provide quality services to its citizens such as health centers, food for school children, water, and roads to help farmers market their produce. Investments in African infrastructure alone to meet the Sustainable Development Goals carry a price tag of an estimated US$93 billion a year.

Government contracts with private companies will be vital to delivering on this promise of public benefit. Across Africa, on average half of government spending is on public contracts. Worldwide, public contracting adds up to US$9.5 trillion per year, equal to 15% of global GDP.

Public contracting is where the power and the money is. It comes as no surprise, then, that public contracting in Africa, like in many other places around the world, often suffers from poor planning and corruption. The OECD, European Commission, World Economic Forum and UN Office of Drugs and Crime all agree that public procurement and contracting is a government’s number one vulnerability for corruption and fraud. Costs are huge: some 10-20% of procurement budgets may be wasted. In a more corrupt country, the same road can cost almost 50% more than in a better governed one.

This is unacceptable. Given that it is taxpayers’ money involved, citizens should know why a school has not been built, why medicines are so expensive, or why a road is in disrepair after only one year. Business in Africa also suffers from unresponsive governments. In 16 of 19 countries surveyed in Sub-Saharan Africa, companies have to wait longer than 30 days to receive their payment.

However, not everything is bleak with regard to contracting in Africa. At the Open Government Partnership (OGP) Regional Africa Summit in Cape Town last week, a group of African thought leaders emerged who are transforming public procurement from a box-ticking exercise, to use open contracting so that it delivers better deals for governments, a level playing field for business, and quality goods and services for citizens.

One of these thought leaders is senior-deal-maker-turned-philanthropist Mo Ibrahim. During remarks at the Summit he broke the myth of commercially sensitive information in procurement. “There are no trade secrets in public contracts,” he said. “Winning business through an open contracting process is not altruism, it's good business”.

Kenneth Brown, Chief Procurement Officer in South Africa also said that we “need to deal with this evil [corruption] by tackling it head on”.

The Summit highlighted other powerful procurement innovations that are being unlocked across the continent:

  • At the launch of South Africa’s new OGP National Action Plan, Deputy Minister Ayanda Dlodlo said that the government will work on implementing the open contracting principles and called for evaluation meetings to be open to the public. This positive remark from the deputy minister complements reforms recently undertaken by the Office of the Chief Procurement Officer (OCPO) in the National Treasury. The OCPO has introduced a central supplier database and an eTender portal.
  • The government of Zambia is developing a new e-procurement system that allows open data to be published in accordance with the Open Contracting Data Standard.                                     
  • In Nigeria, civil society is building powerful analysis tools for public accountability. The Budeshi platform (budeshi.org) connects procurement and budget data. Civil society groups in Kenya and Malawi, supported by a newly formed working group on open contracting by the Africa Freedom of Information Center, also want to start using Budeshi.
  • In Ghana, the only African country that included an open contracting commitment in its National Action plan, civil society reviewed local content provisions of draft contracts. They also launched two portals ouroilmoney.org and oilmoneytv.org.  
  • In Uganda, the Public Procurement Authority signed an agreement with the Uganda Contracts Monitoring Coalition to ensure transparency and accountability in public contracts.
  • Government representatives from a range of countries, such as Cote D'Ivoire, Burkina Faso and Sierra Leone, showed enthusiasm for open contracting at the Summit.

The next chapter of Africa’s development depends on getting contracting right. If, under the umbrella of the OGP, we help this new generation of open contracting to grow strong and to reach more countries and sectors, we can change the fate of Africa.

Please read the brief Open Contracting in Africa: The Next Generation of Africa.                          

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