AG wants local businesses supported

The Attorney General (AG) Thabo Chakaka Nyirenda has conceded that regulations to empower local businesses in public procurement have taken long to be in force.

But he said the Ministry of Justice will soon finalise the regulations to facilitate enforcement of the laws.

The Public Procurement and Disposal of Assets Act, enacted three years ago, requires that 60 percent of procurement be awarded to Malawians.

Section 10 of the PPDA Act reads in part: “A procuring entity shall ensure prioritisation of all bids submitted to give preference to 60 percent indigenous black Malawians and 40 percent others for national competitive bidding”.

However, for this provision to be operationalised there is need for regulations, which are currently at Ministry of Justice and Constitutional Affairs for vetting.

In an interview on Monday, Chakaka Nyirenda said even in the absence of the regulations, PPDA is at liberty to provide directions to ministries, departments and agencies (MDAs) to ensure that they give the required preference to Malawian firms.

The AG said after termination of the $60 million (about K47.4 billion) contract between Technobrain and the Department of Immigration and Citizenship Services, he has advised the PPDA to ensure that the new passport deal favours local firms to keep up with the provision of the law.

Chakaka Nyirenda said: “I had a meeting with PPDA and we have agreed that the Technobrain [passport] contract will be advertised and it has to be strictly for Malawians and if it is given to an international bidder, they have to partner with a Malawian firm.

“That is the direction we are taking to ensure that Malawians fully benefit from public contracts.”

Apart from the AG expressing interest to ensure that indigenous black Malawians get a large share of public procurement, President Lazarus Chakwera in March this year, also appealed to MDAs to see to it that small and medium enterprises are benefiting from public contracts.

He said it was the desire of his administration to break what he called ‘a stupid monopoly where a few individuals monopolised public contracts.’

On August 17, 2021 Secretary to President and Cabinet ZangaZanga Chikhosi issued a circular to all MDAs as a follow up on the earlier presidential directive advising controlling officers to give preference to indigenous black Malawians in all procurements under national competitive bidding and request for quotations.

In a written response, PPDA spokesperson Grace Thipa confirmed that the regulations are not yet in force as they are going through vetting.

She said: “The regulations on the 60/40 provision contained in Section 44 [10] of the Public Procurement and Disposal of Public Assets Act 2017 are not yet in force, therefore not in use by procuring and disposing entities”

In the absence of regulations, in 2019 PPDA issued a circular which guides all procuring entities to give a margin of preference of up to 20 percent to all indigenous black Malawians, as an interim measure, which has not really yielded results.

A lawyer in the public service familiar with procurement procedures, who did not want to be named, said it is really difficult to have MDAs implement the 60-40 provision in the absence of the regulations.

“Regulations will outline what is supposed to happen. Regulations set standards and those standards make implementation of the law quite easy.

“As things stand now the delays to put the regulations to use are potentially undermining the spirit of the law,” said the lawyer.

Black Indigenous Business Network national coordinator Kettie Kamwangala yesterday said, some MDAs have, so far, shown willingness to support indigenous firms.

But she said having regulations in force would make a huge difference.

Kamwangala said: “We are coming from a background where a few people have dominated supply of goods to government and, therefore, demand for experience in supplying similar goods will only perpetuate the monopoly we are crying about.

“What must mat ter is experience in doing business and probably the experience of the manufacturer of products. Such an approach will allow us benefit from the public procurement.”