Is the government tapping the leaks in the public procurement process?

Abayomi Tejan: Sierra Leone Telegraph: 3 August 2019:

President Bio has a daunting task at hand in revamping an economy fraught with systemic leakages here and there, that are affecting economic performance. He has challenged himself to creating employment for the youth, reduce inflation and poverty, promote foreign direct investments, and ensure free quality education, all at once.

Some of these leakages were mere trickles, others oozing, while the major ones are venting profusely from a porous fiscal regime, staffed with men and women of avarice and prodigious lifestyle.

Where did all that money go? 

Well, President Bio wants some answers, and he wants them now. The Anti-Corruption Commission (ACC) boss – Francis Ben Kaifala, has recovered billions of Leones of embezzled government funds, as well as fraudulently converted public assets from officials of the previous government.

Many came by way of confession and out of court settlements between the suspects and the ACC, in order not to belabour issues and waste everyone’s time. Many of the evidence Unearthed by the ACC were much too direct and incontrovertible to bother the courts with unnecessary and costly litigation.

More ominous are the stark revelations now filtering from the ongoing Commissions of Inquiry (COI), of massive impropriety committed by serving ministers during the decade of APC rule.

So, one should not take offence when people say that those politicians, most but not all, were palpably corrupt. The leakages in the procurement process dwarfed all others, as could be gleaned from three consecutive Audit Reports since 2012 – literally indicting heads of Ministries, Departments and Agencies (MDAs), for persistent breaching of procurement rules.

Eighty percent of government expenditure is spent on public procurement of goods, services and works contracts.

According to a World Bank expert, Mr Apronti, twenty percent of the money ‘ends up in private pockets,’ the Ghanaian expert reported. That was over a decade ago when public procurement became the focal point of the SLPP government led by late Ahmad Tejan Kabbah, hence the establishment of the National Public Procurement Authority (NPPA) in 2004 by an Act of Parliament.

Since the inception of the NPPA, the public sector – that is MDAs, have come under scrutiny for various degrees of probity into how and what they procure, and at what cost.

Government cash economy in 2004 benefited from generous donations, grants, concessions, debt cancellation from development partners, the World Bank and the IMF aimed at salvaging the war battered economy and put the pieces back together again. Up till today, a good chunk of the country’s economy is still donor driven.

The NPPA rolled out its mandate, and Government Procurement Units sprang up across all MDAs, driven by the enthusiastic leadership of Mr Alfred Kandeh – then Chief Executive, now Chairman of the Board.

Most, if not all MDAs, did not share the CEO’s enthusiasm though, but the process had begun and would continue, until 2007 when a new government and administration took over – the APC, led by Ernest Bai Koroma.

If the rolling out and decentralization process of public procurement was struggling to gain traction under the first post-war SLPP government, it virtually ground to a halt after 2007 under APC. And so did the services of Mr Kandeh, the NPPA enthusiast.

MDAs reverted to the old ways of doing things, whereby heads of the various government entities were at liberty to procure goods and services without the NPPA hovering above their heads, and business continued as usual.

Mandatory thresholds for competitive tender for procurement are set out in the Act; sixty million Leones for goods and services; three hundred million Leones for public works. Although these regulations are meant for deterrent against unlawful procurement, however contract splitting provided a loop-hole for procuring entities in order to avoid  competitive tendering, while keeping in line with the provisions of the NPPA Act.

Procurement Units in MDAs became dysfunctional, procurement officers redundant; heads of procuring entities (Ministers and Permanent Secretaries) became ‘de facto’ procurement officers accountable to themselves only.

With NPPA tamed and virtually incapacitated, a lot of procurement budgets – billions of Leones, floated around in the cash economy. At the same time, mining companies such as African Minerals, Koidu Holding, London Mining and a host of others in the gold and diamond sectors, beefed up revenue earning and created jobs.

Gross Domestic Product (GDP) began to climb steadily from minerals export; consumer spending too, increased.

The first five years of APC rule saw a flurry of economic activities in the open local market. Sierra Leone’s GDP growth outstripped the rest of the world’s at over 20%.

The APC government embarked on ambitious road construction projects, alongside other public infrastructure works. But with the NPPA relegated to the backbench, public procurement took on a life of its own – giving politicians a free hand to buy and sell at will, and making a lot of ‘off-the-books’ money in the process.

Then two occurrences took place that would change things drastically. Firstly, the price of Iron Ore suddenly slumped, impacting massively on GDP growth, bringing the rate down to minus 21.5%. Businesses folded, jobs lost, government’s budget deficit widened, private investment squeezed as government domestic borrowing increased.

Then came the Ebola crisis, exacerbating the government’s financial problem to cataclysmic proportion. But for the swift response of the country’s international development partners and other countries such as Britain, the US, China and Cuba, Sierra Leone’s economy would have collapsed completely.

Nonetheless, even under those frightful economic conditions, evidence of misappropriation of Ebola funds surfaced. It would appear that all procurement rules and regulations were quarantined along with high risk communities.

During the pandemic, public procurement rules and regulations became obsolete, existing on paper and in name only.

Humanitarian assistance, however, helped to mitigate privation among the masses; post Ebola recovery funding from various international sources and humanitarian agencies heavily subsidized government expenditure. But the government’s budget deficit persisted and domestic borrowing continue to spiral.

By 2016 however, the economy had begun to suffer acutely from corrupt public procurement and wasteful government expenditure. A year later, the APC government was compelled to implement a string of austerity measures to save money. Ministerial allowances were halved, their travelling and delegations reduced significantly.

Then electioneering began, so did the draining of the economy to prime the electorate into voting in a third-term APC government. This never happened; President Bio was ushered in, and is now called upon to restore sanity in public service delivery.

President Bio has so far lived up to his promise to fight corruption and make education free. But public expectations about the economy among the masses remain high and unfulfilled. The current rate of inflation and hike in prices of basic consumer items are problematic.

It is early yet to gauge the work of the NPPA so far under president Bio’s administration. The new Chief Executive, Mr. Ibrahim Swarray, has been making headlines in the media. He is said to be determined to ensure that MDAs procure goods and services according to the rules.

He is also believed to be hot on the heels of public entities – admonishing them to comply or face the consequences. He has told the media that the public tendering and bidding process would soon go digital, doing away with cumbersome and untidy paper work.

A price norm has been published to gauge realistic contract pricing and allow for prudent award of government contracts to lowest responsive bidders. However, this is not new; the first CEO, Mr Alfred Kandeh, (who ironically is the current Board Chairman) announced similar plans during his intense nationwide sensitization tour, rolling out procurement units across MDAs, although he did not last long enough to see them through.

Now, it’s Mr Swarray’s turn, and he is being watched closely. He is CEO of one of the most crucial arm of government that could spell success or failure for the New Direction.

1 Comment

  1. When an article is so well written, the subject is usually unambiguously understood to help commentators make their contributions in an equal fashion – fvourably or otherwise. The picture that comes through is that of a country that is in a very sad state, thanks to politicians who have no conscience and so are able to plunder the nation’s resources at will – and with conspicuous impunity too.

    President Bio may be determined to force Ministries, Departments and Agencies [MDA] to once more follow the rules of procurement and have the right people in place to execute his wishes, but will this renewed determination only have life for as long as SLPP are in power?

    The evidence leans heavily to a yes. The author of the article [Abayomi Tejan], clearly states that upon coming to power in 2007 the Ernest Koroma regime killed the National Procurement Authority [NPPA], established under President Kabba for the sole purpose of ensuring that all government Procurement of goods and services were within the law to stifle fraud and corruption.

    So while NPPA may well be fully resuscitated now, a future government led by APC could kill it once more, whether or not it is in violation of an Act of Parliament. The impetus would be the desire to restore or reclaim what they are losing now under the crunch of the ACC and COI. But I wonder whether there is a way out for our dear country.

    Abayomi touched on the decline of the economy when the price of iron ore and other commodities plummeted. Well this only reveals the incompetence of the Koroma Administration. For Allah’s/God’s sake, it is when things are going well that a good government will build up its reserves to ensure that if things take a nose dive, there is a good probability of a successful pull up by tapping on what has been saved until things improve again. This is form five Economics.

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