Apr 29 , 2023

The federal institutions compelled to electronic procurements after a couple of months are apprehensive over the drawbacks observed in the pilot following the Public Procurement & Property Authority's decision to exit the manual procedures.

Experts from federal institutions claim despite the enduring sides the decision is rushed owing to the premature stage of the system to shoulder the annual procurements made by federal institutions.

Aschalew Dejene, chief procurement officer at the Ethiopian Roads Administration, observes challenges related to retrieving essential data, such as the lists of goods and services offered by suppliers suddenly vanishing from the system.

"It protracts procedures beyond the initial timeline," said Aschalew.

He said issues related to the computational capacity of the system to perform calculations essential to the procurement procedures are another complication faced by procurement personnel.

The awareness gap observed from the suppliers' side to take part in the bidding is also compelling the institution to extend opening dates for bids, according to Aschalew.

Haji Ibsa, head of the Authority, admits the existence of systemic problems with the newly developed software but firmly believes the measure taken by the Authority is an indispensable step to realize the plan to break away from manual procurement that has been draining the scarce resources of the country.

"We need to face challenges," he said.

The Authority plans to make electronic procurement compulsory in all 125 federal institutions and universities.

The pilot project launched about 10 months ago with nine federal institutions has served to have preserved a significant amount of public resources that used to be wasted due to inefficiency.

Close to 74 federal institutions began implementing electronic government procurement (e-GP) at the start of the fiscal year, where 70 had either floated a bid or received products and services using the platform.

The selected institutions were recommended by the Ministry of Finance’s study taking the human power, implementation of an integrated financial management information system (IFMIS) and the annual procurement load into account.

According to Tadesse Kebede, e-GP project manager at the Authority, the lack of suppliers on particular items such as vehicle spare parts and furniture is one of the major exceptions compelling institutions to procure using manual procedures.

The project manager believes that electronic procurement leaves no room for corruption and unnecessary expenses in administering bids while allowing institutions to control a wide range of issues ranging from planning to the administration of contracts online.

"It'll significantly decrease complications," Tadesse told Fortune.

The institutions have floated bids worth over 42 billion Br and procured in the amount close to 4.5 billion Br on the platform.

A study conducted by the Copenhagen Consensus shows the implementation of e-procurement systems can save 6.5pc of annual expenditure on average for developing countries.

Governments are the largest buyers constituting 15pc share of the global GDP. The huge amount of monetary transactions circulated in procurement opens a wide room for corruption that cost huge sums to the global economy. Recent developments in electronic procurements have provided epitomes in addressing issues related to corruption and adequate utilization of government resources.

The system is developed by the local software developer Perago Systems, bagging the contract for 18 million Br.

Behailu Sintayew, a  fintech operator with over 14 years of experience, said measures taken to digitize governance systems are sensible steps considering the global trajectory toward digitization. However, he observes ambitiousness in most of the digital initiatives rather than taking one step at a time. He referred to the gas station's long queues after introducing a mandatory fuel payment system and its repercussions.

Behailu said making e-GP the mandatory means of procurement with all the issues raised by stakeholders and precarious network infrastructure is likely to create destruction on the entire system as glitches can impede institutions from performing ordinary tasks.

He recommends beginning the process complemented by the manual system until the developer addresses issues and ensures reliable network coverage.

"Our digital ambitions should be balanced with our technical capacity," Behailu told Fortune.

PUBLISHED ON Apr 29,2023 [ VOL 24 , NO 1200]

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