Lecturer in law/blogger challenges Ethiopia’s public procurement law on grounds of its inapplicability to state agencies By Keffyalew Gebremedhin

February 20th, 2012 Print Print Email Email

The other day, I came across an interesting article on the Ethiopian Legal Brief, which deals with Ethiopia’s Federal Government Procurement and Property administration Proclamation No.649/2009. The article entitled Ethiopian Public Procurement Law applicable only to the private sector, written by Abrham Yohannes, a lecturer at the College of Law, Haramaya University, and a lawyer licensed to practice law at all levels of federal courts and Harari Regional courts. His article caught my attention for both its seriousness and the high value of its information.

What troubled Abrham Yohannes, also editor of Ethiopian Legal Brief, was Article 3 (2) (b), which states,“this Proclamation does not apply to contracts a public body enters into with another public body for the provision of goods, works, consultancy or other services at cost.” By the inclusion of this article, the law has set public agencies, the ministries, higher education institutions, commissions, etc, which are partly or wholly financed by the federal government to go their ways, since they would not be subject to procurement procedures, when acquiring goods and services.

Bear in mind that, as a ‘developmental state’ Ethiopia’s development activities are mainly spearheaded by the numerous state agencies acting as its vehicles. With pen strokes, as per Article 3 (2) (b), its officials are under no requirements of the law to be obliged by the need for transparency or competition, when they expend huge amounts of taxpayers’ funds every year for the purchase of goods and services. In this regard, the importance of Abrham Yohannes’s insight into the serious deficiency in our country’s public procurement law he has pointed out cannot be sufficiently emphasized.

The overriding tasks of these government agencies is service, which they have to develop and provide the public. To do so, they promote development ideas, plans and implement programs and projects, hire consultants, contractors and sub-contractors. They also consume lots of expensive goods procured from domestic and foreign markets. Perhaps the concern here may appear a bit magnified. Nevertheless, it is important to realize that, of itself this requires them to engage in numerous investment activities using public funds, operating as contracting parties in agreements and contracts they sign with other agencies — even if with other state agencies — behind which there could be an outside firm, domestic or foreign, since other government agencies cannot produce all the goods and services others need.

Readily comes to mind a kind of arrangement that can arise between EthioTelecom and EEPCo, ministry of water resources and EEPCo or two or three universities looking for some materials or that sort of thing. There are possibilities where the distinction in engagement between public and non-public contracts could get fuzzier.

Clearly, what Article 3 (2) (b) underlines is, so to say, the irrelevance of the law to procurement contractual relations between public bodies. There are enormous possibilities that this could allow subtle collusion of personal interests. If one examines this closely what they have done with that provision is to handicap possibilities of closing down loopholes against crafty individuals that could exploit today’s business exchange sophistication to personal gains.

In addressing his concern regarding this aspect of the public procurement law, Ato Abrham Yohannes’s premise is:

Generally speaking, the regulatory framework of public procurement as tool in the formulation and implementation of an effective and efficient system of public procurement should be guided by some internationally accepted basic principles. These principles are: transparency, accountability, objectivity, fairness and non-discrimination.
The principle of transparency helps to attract a greater number of participation, thereby encouraging competitiveness. It also makes the whole procurement process open and fair, thus avoiding the possibility of favoritism and discrimination. Transparency also makes it easy for procuring entities and officials to be accountable. Most importantly, it is an effective tool to curb corruption.

In fact, he argues that irrespective of the role played and the level of participation of the government or the private sector, the whole purpose of the exercise is to acquire the best quality of services with minimum cost, which makes an efficient and effective system of public procurement an indispensable necessity.

In other words, if officials running public agencies are left free to act as they like, unchecked by laws and regulations as has been so far, it means that no thought has been given to the fact that they are only lesser gods. In our country’s traditions and the prevailing political environment, they are likely to be constantly torn apart by the temptations of giving and receiving favors to political connections, the pressures of nepotism and expectations of other connections. How many of them mangage do not to blink in the face of it becomes very clear if the constant allegation by the prime minister’s about “our thieves” within his government should serve as a guide to the answer.

It should be borne in mind that it is the good laws in society, their applicability to all that shape and strengthen society’ values. It is a system and same process that everyone follows and governs everyone that can help society get and give its best. This is because in the process individuals could develop faith and confidence in the system and they are also helped to grow and institutions to function better. The author of the article stresses that transparency helps to attract wider participation, thereby encouraging competitiveness. He observes that by itself would make the whole procurement process open and fair, shutting any openings for favoritism and discrimination. Mosat of all, he argues, “Transparency also makes it easy for procuring entities and officials to be accountable.”

While Ato Abrham Yohannes acknowledges the improvement Proclamation No.649/2009 has introduced over a past that has been ‘lawlessness’, he still worries on wo accounts. Firstly, the exception granted to government agencies under Article 3 (2) (b) exonerates them from being subject to procurement regulations and procedures if they intend to participate in the provision of goods, works, consultancy or other services at cost. In effect what happens is that these bodies win contracts without any competition. Because of that they they would not have to labor to improve their performances and the quality of services they provide to the public. Most of all, they would not have to worry about costs since the state budget takes care of it.

His second concern is that this is a federal law and it applies only to federal entities. Unfortunately, the regional states are getting their lessons from a bad teacher. The writer cites the initiatives by the Amhara regional state, Addis Ababa and Dire Dawa administrations that, in devising their own procurement laws, have followed the model of the federal government in turn giving exemptions to their regional state agencies in respect of procurement.

In so doing, just like federal government agencies, the regional governments also have deprived themselves of the prospects of building a better system through greater transparency that competition forces and improves delivery of their services that such a system obliges their agencies to deliver in such areas as education, health, roads, water, extension services to farmers, veterinary, etc –.

As the country moves more and more into regional integration with other neighboring countries, one should not also exclude how its undeveloped procurement laws at the national and regional levels would make it difficult to benefit from good competitive procurement laws or loose out altogether.

I cannot thank enough Abrham Yohannes for putting his finger, as he did on something that has been badly wrong in our country! I share his conviction that, if Ethiopia is to fight corruption successfully, more particularly as a country that has been profusely bleeding, among others, from the rising level of corruption in the country and the massive capital flight it has experienced over the years, the first step to sealing the leaking hole is to design a good law. Only such laws and their proper implementation would stop the bleeding.

It means that, as a first step the country needs to be armed with the requisite laws! The second step is compliance with the law, which cannot be demanded when and where there is no law or regulation to comply with.


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