Calls for more action on preferential treatment

Amid concerns that indigenous black businesses are not given preference in government contracts, economist Chinyamata Chipeta says more needs to be done to improve the proportion of contracts awarded to them.

In a written response to a questionnaire on his assessment of the preferential treatment provision four years after its launch, he, however, said there has been a marked increase in the number of procurement contracts awarded to country’s black indigenous businesses, but more can be done.

He said: “Proportionately, the percentage of contracts awarded to them [black indigenous businesses] annually is below 60 percent, which the procuring and disposal entities are compelled to award to them by law.

“Although the law states that the responsible entities are compelled to award a stipulated proportion of procurement awards to them, this is subject to meeting eligibility criteria, satisfying the regulations and winning bids.”

Chipeta observed that many indigenous black businesses have not been submitting winning bids while others have had problems with eligibility criteria and regulations, thereby losing out.

To maximise benefits from the preferential treatment provision, he suggested the need to improve understanding of the provisions of the law, build the capacity of indigenous black enterprises, enhance the business environment, teach indigenous black entrepreneurs how to prepare winning bids and build a network for sharing knowledge of procurement processes.

The preferential treatment provision is provided for under Section 44 (10) of the Public Procurement and Disposal of Assets Authority (PPDA) Act, and compels procuring and disposing entities to award 60 percent of all contracts under the National Competitive Bidding to indigenous black Malawians and the remaining 40 percent to others.

Black Indigenous Business Network president Kate Kamwangala last week conceded that while they are yet to fully benefit from the law that compels procuring and disposing entities to award 60 percent of all contracts to indigenous black Malawian contractors, they remain hopeful.

In a separate intePublic Procurement and Disposal of Asset Authority public relations and communications manager Kate Kujaliwa said in the absence of the regulations, the authority issued a circular for the 20 percent preference for Malawian bidders.

She said: “The PPDA is currently reviewing the Public Procurement and Disposal of Assets Act (2017),” he said.

“The whole essence of the review is to strengthen the law and cover some existing gaps.”

The provision was has been facing resistance from some quarters who argue that the regulations are discriminatory.