The Institute for Public Policy Research (IPPR) has expressed concerns that recent procurement regulations in Namibia increase the risks of corruption, political pressure, and patronage. The regulations, gazetted on 4 August, raise the threshold for discretionary spending, allowing public entities to run procurement for more expensive projects without going through the Central Procurement Board of Namibia. This change has sparked fears of reduced transparency and oversight in public procurement.
According to IPPR research associate Frederico Links, the new regulations create a new category of high-value public entities that can contract for works projects worth up to N$500 million. This represents a significant increase, and Links warns that it considerably raises corruption risks. Public procurement in Namibia is already marked by a lack of transparency, non-compliance, poor governance, and weak oversight. The IPPR has presented a new report highlighting these concerns.
The new regulations reveal that 260 public entities are now running their own procurement, an increase from 176 in recent years. This list includes companies like August 26 Holding Company and its subsidiaries. Links questions why these companies were not on the list earlier, suggesting that they may have been operating with a parallel procurement system. The IPPR report notes that these commercial entities' inclusion on the list implies they have conducted procurement in the shadows until now.
August 26 Holding Company has never submitted a public procurement plan in the past 10 years. Furthermore, only 32% of public procuring entities have submitted their annual plans to the Procurement Policy Unit (PPU) halfway through the financial year. Links attributes the changes in procurement regulations to a political reality where the government aims to fast-track projects by giving individual agencies power over procurement.
According to Links, corruption risks are elevated due to an executive urgency to implement ruling party election commitments from 2024. The Ministry of Finance has responded to the IPPR's concerns, stating that the 2022 amendment to the Public Procurement Act expanded the definition of a public entity to include subsidiaries. The ministry added subsidiaries and entities that had been omitted from the original regulations to the new list.
Ministry spokesperson Wilson Shikoto explained that the increase in listed entities does not represent the creation of new procuring bodies solely for procurement purposes. Some entities had been applying the act despite not being on the list, while others qualified as public entities but were not applying the act. Adding these entities to the gazetted list will facilitate compliance monitoring, Shikoto said.
The Ministry of Finance maintains that the new 'high-value entities' were identified as having the capacity to manage large-scale procurement projects. The IPPR's report highlights significant concerns about the potential for corruption and mismanagement in Namibia's public procurement processes. The government must address these concerns to ensure transparency and accountability in its procurement practices.
Key points
- New procurement regulations in Namibia raise corruption risks, says IPPR
- High-value public entities can now contract for works projects worth up to N$500 million
- 260 public entities are now running their own procurement, up from 176 in recent years
