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Public Procurement in Africa: Opportunities and Challenges of Capacity Building Interventions

Public Procurement in Africa:  Opportunities and Challenges of Capacity Building Interventions

Why focus on public procurement

ü It is the principal means of organizing spending of public resources for delivery of goods and services
ü Public procurement depends on a number of critical processes which need to function seamlessly for effective results
ü Demand assessment to identify needs for goods and services
ü Budgeting and prioritizing actions to allocate resources towards critical needs
ü Awarding, supervision, and management of contracts to get goods and services delivered
ü Regulating the quality of delivered goods and services and enforcing contracts
ü Sub-Saharan African countries have consistently under performed other regions in most of these areas, despite their importance for development results
ü Financial crisis in 2008-2009 is putting pressure on availability of resources (Aid, FDI, Remittances) and countries have tor rely even more on domestic resources
ü With limited domestic resources it is even more critical that they are spent efficiently and effectively
ü A transparent and efficient procurement system will not only aid in generating savings that can be reinvested in development, but can affect the business environment and the credibility and confidence of the citizen in public services






                            Status of E-Procurement in Africa

ü Africa has had challenges in implementing e-government with many projects being partial or total failures
ü Failures have been attributed to three major factors:
ü state agencies have been slow in putting in place the needed capacities;
ü lack of ICT infrastructure and mass connectivity to the Internet have hampered much of the expected roll-out; and
ü antiquated administrative cultures have dominated the under-resourced and unaccountable bureaucracies 
ü Delays in implementation of e-government have led to a slow take-off on e-procurement
ü Africa needs to address major weaknesses in the area of public procurement in addition to putting in place the critical capacities for successful e-procurement
ü Successes in using ICT to solve other problems such as in banking, health, and education on the Continent bear well for the future of e-government and e-procurement



                                    Weaknesses in procurement systems in Africa                                                  
•      Legal frameworks:   for public procurement lack clarity, are not comprehensive, and many are outdated
•      Transparency & disclosure:  no systematic disclosure of information on procurement award and performance, little transparency and streamlining of disclosure mechanisms
•      Accountability & anti-corruption:  non compliance in implementing procurement rules, few countries with anticorruption and conflict of interest provisions in place, and limited consultation of public before contract award
•      Separation of functions:  central procurement authorities involved in operational activities with no separation of function between initiating, authorizing, approving supervising and controlling
•      Standards of conduct:  Prevalent conflicts of interest by officials working in central procurement units and procurement carried out with little compliance with the required standards of conduct
•      Skills and capabilities:  lack of a cadre of skilled professionals in public procurement.




                         Indicators of the environment for public procurement
•         Quality of Public Administration
•         Business Regulatory Environment
•         Transparency, Accountability & Corruption in the Public Sector
                            Challenges to be addressed
•      Insufficient skilled professionals
•      Lack of strategic treatment of procurement
•      Few systematic approaches to procurement
•      Corruption in public procurement
•      Inadequacy of accountability and control mechanisms
•      Changes in the institutional environment
•      Commitment to change all dimensions
•      Involvement of all stakeholders to create ownership for reforms
                                   Reforms needed in Africa
•      Legislative framework:
–     Compliance with applicable obligations from national and international standards
–     Regulations, documentation, and tools to support implementation
•      Institutional framework and management capacity:
–     Mainstreaming and integration into the public financial management system
–     Creating a functional management or regulatory body
–     Strengthening the institutional development capacity
•      Procurement operations and market practices
–     Enhancing the efficiency of procurement operations and practices
–     Functionality of the public procurement market and implanting necessary changes
–     Putting in place contract administration and dispute resolution provisions
•      Integrity of the procurement system:
–     Establishing and enhancing control and audit system
–     Putting in place an efficient appeals mechanism
–     Increasing access to information,
–     Introducing ethics and anticorruption measures
                              Capacity building approaches in procurement
•      Definition:  OECD (2002) definition of capacity, which is “the process whereby people, organizations and society as a whole unleash, strengthen, create, adapt and maintain capacity over time.” 
•      Any approach to capacity development for procurement reforms needs to take into account:
–     Political environment
–     Implementation capacity


                  Approaching Capacity Development in Varying Contexts
Political environment                                                                                                                                    
•         Reforms through selective pilots that are monitored and scaled-up when successful, working with champions who can get things done while building broad-based support

•         Planned comprehensive approaches with fixed targets and scheduled activities that are monitored and adjusted over time across a wide range of areas

                                                      Approach

Approach


Unfavorable

•         Incremental change of existing practices , working with selected champions, building-in  maximum adaptability and flexibility to support emerging centers of excellence and resolve

•         Working with a broad range of areas for reform but seeking incremental change while building M&E capacity, using guidelines rather than fixed targets  


           Case of Ghana
What works

•         Overall environment for public procurement above average
•         Robust Legislative and Regulatory framework, further improvement establishment of National Public Procurement Board and tender committees

What doesn’t
•         Knowledge about new procurement framework by MDAs and private sector
•         Limited specialized audits of procurement performance
•         Inadequate public awareness of e of complaints and transparency unit


Recommendations

•         Implant web-based procurement planning tool
•         Build up sustainable procurement training programs within local training institutions
•         Strengthen procurement expertise among audit institutions
•         Strengthen private capacity to successfully compete for government contracts




        Focus areas
•      Human capacity:  skills, behaviors, motivation attitudes
•      Organizational capacity:  information systems and logistical capacities, monitoring and supervisory capabilities
•      Institutional capacity:  integration of public procurement in other systems, strengthening oversight functions, and focusing on inclusion and dialogue mechanisms
        Human Capacity
•      What:  Skills building programs in areas such as drafting and updating procurement regulations; building awareness and sensitizing stakeholders against corruption; conducting competency-based and advanced training courses in use of procurement information system and understanding of good governance in public procurement
•      Who:  public procurement professionals, staff of national civil services, local government, oversight institutions, private sector, civil society
•      How:  Deep skills building as in the Ghana Institute of Management and Public Administration (GIMPA) project; on-the-job training as in the WAEMU project
           Organizational Capacity

•      Transparency and Accountability:  information systems that publish information on public contracts, procedures, appeals and information on the conditions for lodging appeals
•      Efficiency and effectiveness:  online procurement with incremental investments in upgrading the Public Procurement Information Systems and building the capacity of users and managers of the public procurement information systems. 
•       Monitoring and supervision:  strengthening monitoring and supervisory bodies to carry out oversight roles; inclusion of experts representing the various stakeholders (public sector, private sector, and civil society); regulatory compliance; tracking progress in  implementing reforms; and ensuring functioning of non-judicial appeals mechanism for bidders
•       Logistical capabilities:  strengthening the logistical capacities of procurement institutions to handle diverse information systems, contract processing mechanisms, and information and publication roles and functions
•      Example:  financing purchase of equipment and installation of a technology platform as in the WAEMU project
              Institutional Capacity
•      Coherence:  integration of public procurement into budget management by investing in computerized budget management system and training of the users and revision of public procurement procedures manual
•      Oversight: strengthening oversight functions of Parliament, civil society watchdogs, and the professionalizing voices of the private sector and civil society
•      Example:  building capabilities for coherence in sub-regional policies as in WAEMU project; common platform for procurement and disbursement for all project directors of entities funded with ACBF grants





            Case of Zimbabwe
What works

•         Overall environment for public procurement enhanced by Regional Competition
•         Robust regional sourcing techniques work well in the face of severe scarcity  of goods, shortage of foreign exchange and hyperinflation
•         Procurement Board and tender committees

What doesn’t
•         Need for rigor and scrutiny to avoid local hoarding and price gouging
•         Rules of competition and excessive monitoring can lead to non-procurement


Recommendations

•         Implant search tool to uncover regional opportunities for procurement
•         Build up sustainable procurement training programs across a sub-region
•         Strengthen procurement expertise among regional audit institutions
•         Strengthen private capacity for regional procurement


             Conclusions and way forward
•      Public entities in Africa spend large sums on public procurement
•      Budget constraints make it imperative to introduce efficient public procurement procedures and systems to ensure value for money
•      There is a need for efficient, transparent, accountable and professionally managed public sector procurement systems which enjoy high level of business confidence and ensure consistent attainment of best value for money
•      Whilst most African Countries have enacted legislation to better manage public procurement, there is still the need for genuine political commitment in enforcement and compliance
•      Eradicating institutionalized corruption from public procurement takes time but requires swift behavioral change
•      Public access to procurement information is important in promoting transparency and as a key tool for anti-corruption; e-government initiatives could be instrumental in that regard
•      Procurement reforms in Africa need to encompass the use of technology in managing procurement processes










What Procurement Officers Need to Know About Managing Their Millennial Workforce

What Procurement Officers Need to Know About Managing Their Millennial Workforce
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It’s time for Chief Procurement Officers to cast aside any preconceived notions of their millennial employees and take a hard look at one of the fastest growing segments of the workforce today.
Many describe this group as entitled, unmotivated, and unable to stay in one place for long. Others say millennials have strong voices that should be heard, as well as an even stronger connection to trends, given their tech-savviness and ability to network with social media.
But being a millennial doesn’t just mean being computer literate and hungry for constant change. Being a millennial also means adapting to other generational ways of thinking. While many senior-level executives are re-examining HR practices and training models in order to accommodate the needs of this generation, others believe the millennials are the ones who have catching up to do.

Here are some of the most important things for Chief Procurement Officers to keep in mind about managing their millennial workforce.

Older Generations May Alienate Millennials
The question of how an older generation senior-level executive will manage a millennial worker is one that has come up recently in my conversations with Chief Procurement Officers. When asked about the biggest obstacle in millennial management, Jeff Scott, Chief Procurement Officer at RTI International, argued that older generations may be resistant to change, which can alienate millennials and make their desire to “jump ship” even stronger. A recent report published in Millennial Branding shows that 45% of companies experience high turnover with those employees identified as “millennials” compared to older generations by a 2:1 margin.

Retaining Milennial Talent
The question then becomes how to retain top millennial talent. In fact, talent retention is one of the top agenda items for CPOs today. In a recent Consero Group survey conducted with 45 CPOs at an event earlier this year, 72% of executives did not see a sufficient pool of trained procurement talent available to support hiring needs.

While procurement departments are prioritizing talent retention overall, they are zeroing in on the turnover rates of their younger workforce. According to Jeff Scott, the difficulty in managing and retaining millennials is that they have a hard time maintaining the perspectives and values of older generations. Values around what defines work ethic differ generationally, he argued. One example given was the idea of working outside of the normal 9-5 routine in order to prove oneself and ultimately move up in the company. Not all millennials see the benefits outweighing the costs of this practice. Diving into the psychology behind different modes of thinking may shed light on this divide in values.

Companies Should Embrace Milennials’ “Growth Mindset”
Carol Dweck, author of Mindset: The New Psychology of Success, compares two different ways of thinking in the world – a “growth mindset” and a “fixed mindset”. The growth mindset is fueled by the idea that if you work hard, you can acquire new skills. The fixed mindset believes that skills and abilities are fixed. One CPO said that when the millennial’s growth mindset is not embraced by the company culture or management, many problems can arise. Namely, that millennial worker will be lost to a different company that fosters a management culture that embraces change.

Older Generations Can’t Be Left Out
Creating an entrepreneurial culture in your company with the aim of attracting and retaining millennials is one proposed change for older members of management. At the same time, how do CPOs and other executives ensure that veterans of the company with that so-called “fixed mindset” are not left out in the cold? The answer is that older executives need to drive change to retain millennials. Alan J. Rice, Vice President of Corporate Procurement at Southern Wine & Spirits of America, Inc., suggests that “If we’re not driving these changes, they’ll go to other companies that are at the forefront of these issues.”

New Training Models Help Millennials Adjust
What does embracing change mean for an older generation of management eager to adapt to millennial demands? First, it helps to identify what millenials’ demands are, such as more flexible working hours, room for upward growth, more responsibility and embracing technology to streamline core job responsibilities, among others. Many companies are implementing new training models and incentives to keep millennials around, but it remains to be seen if these programs actually will impact retention. The impact of these new programs will become even more apparent when one considers that the aforementioned Milennial Branding study found that 87% of companies estimate the cost to replace a millennial employee to be between $15,000 and $25,000.

Corporate Culture Drives Comfort Across Generations
As Alan J. Rice put it, “Millennials are inheriting it all, so managers have to be flexible to them.” There are many perspectives on how to address managing millennials, particularly in the procurement space. At Consero’s upcoming forum taking place this July 26-28th in Newport Beach, CA, this and other important questions will be discussed as scores of CPOs from across all industries will convene to tackle their most pressing leadership issues. “The challenge is and always has been a question of company culture and how to change that so that you can change the practices that keep people, not just millennials, engaged in their jobs, and believing their mission is mirrored by their company,” Rice offered.

As a millennial myself, I agree that company culture can drive whether management makes a case for new programs that are designed to keep millennials engaged. Perhaps you can teach an old dog new tricks, if that’s the case. The true challenge will lie in the willingness of multiple parties to learn from each other and move toward compromises that benefit the company and align the objectives of differing generational perspectives.
By Audrey Ford, Senior Manager, Program Development, Consero Group
June 11, 2015


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