IMPACT OF REGIONAL PROCUREMENT REFORMS ON THE DEVELOPMENT OF A NATIONAL PRIVATE SECTOR

1. IMPACT OF REGIONAL PROCUREMENT REFORMS ON THE DEVELOPMENT OF A NATIONAL PRIVATE SECTOR Ms Carole Kariuki Acting CEO of the Kenya Private Sector Alliance (KEPSA) High Level Forum on Public Procurement Reforms in Africa -Tunis, 16 November 2009

2. History of Public Procurement Reforms in Kenya 1963 – 1969: British system, under the responsibility of Crown Agents 1969 – 1978: Circulars, under responsibility of Treasury/Government of Kenya (GoK) 1978 – 1998: first Supplies Manual; dictated the procurement function within gov’t but not local authorities; schools; institutions 1998: Country Procurement Assessment Report, 1998 – World Bank

3. History of Public Procurement Reforms in Kenya (continued) World Bank Study: Public procurement regulations through Exchequer & Audit (Public Procurement) Regulations, 2001 – abolished Central Tender Board (CTB) Created Ministerial Tender Committees Broadened the scope of ‘public entities’ to include schools; colleges; universities; cooperatives; and local authorities But these were still only Regulations Public Procurement & Disposal Bill drafted, and modified several times

4. History of Public Procurement Reforms in Kenya (continued) Public Procurement and Disposal Act 2005: Operational 1 January 2007 Main features – establishment of the Public Procurement Oversight Authority and the Public Procurement Review Board (to preside over the bidding system) Improvements – variations limited to 15% and problems of ‘air supply’ addressed by systems of committee decisions and guarantees

5. Regional/International Influence on National Procurement Reforms ‘Best practice’ developed using World Bank processes and funding; plus involvement of development partners Public Procurement and Disposal Act based on standard procurement law (UNCITRAL) Adopted by many African states ie Ghana; Tanzania; Uganda Some regional variations

6. Benefits for the private sector Openness Transparency A ‘level playing field’ Governance Reduction in corruption Expansion of business opportunities

7. Challenges Constraints on capacity (submission of tenders and tender documentation) Need for training/capacity building Sensitising SMEs on ‘rights’ Empowering youth sector ie Kazi Kwa Vijana programme WB concerns – still discriminatory regarding local preference schemes and reservations under $700,000

8. Development of an East African Procurement Law East African Procurement Forums held in 2008 and 2009 Peer learning forum Sensitise local private sectors Towards the development of common procurement law Procurement Manual for the East African Community to be tabled by end 2009 – for adoption by mid 2010

9. Features/Benefits of Regional Procurement Manual Will introduce regional preference schemes Best And Final Offer (BAFO) in the case of a tie – a new approach The Kenyan private sector will benefit through their competitive edge 5-year ‘tax equalisation’ period across the region will end at the same time Larger market Sectors – transport; banking etc

10. In pursuit of an enabling business environment….. Thank you Any questions? Carole Kariuki, Acting CEO Kenya Private Sector Alliance (KEPSA) P O Box 3556 – 00100 Tel: +254 20 2730371/2 Fax: +254 20 2730374 www.kepsa.or.ke