GOVT TENDERPRENEURS CRIPPLING THE ECONOMY

ONE would think well-established tendering processes would bring about fairness and transparency in the economy on who gets to do business with government.

Government institutions as well as State-owned enterprises (parastatals, etc.) need to procure goods and services to be able to carry out their responsibilities and services. In fact, some businesses solely exist to supply something, be it stationery, machinery or cleaning supplies to government.

There is big money to be earned through government tenders and a lot of people, as well as established businesses will give up anything and everything to be the stock of tenderpreneurs that supply goods and services to government.

Unfortunately, public procurement is one of the government activities that are most vulnerable to corruption. Notwithstanding the fact that the plethora of transactions and financial interests that come into play when government issues a tender, the corruption risks are further exacerbated by the complexity of the tendering process, the close interaction between public officials and businesses, and the multitude of stakeholders involved.

When you hear of government reporting that it has not paid some of its suppliers in over 18 months and arrears rising to amounts of E3 billion, you know some tenderpreneur is feeling the pinch somewhere. It wouldn’t really be such a sad case if the procurement processes were indeed transparent, fair and awarded to the most deserving entity of our economy. 

The reality is that government’s wallet, aka the G-wallet, is losing millions of Emalangeni due to dodgy and contaminated government tenders. It starts with the rot within government, where the officials issuing such tenders have their own people who they vet into the system to become tenderpreneurs.

The government tendering official gets the notorious 10 per cent cut on every transaction, if not more. Moreover, the transactions are reeked with false billing, double billing, and ridiculous inflation of prices such that you find government constructing a E10 million road for 10 times the price at E100 million.

Through government tenders, government can buy an E80 rim of paper for E500, a E5 000 worth laptop for E25 000 and so on.
The irony is that the country has the Swaziland Public Procurement Regulatory Agency (SPPRA), an institution that is supposed to rid government of all the tendering corruption. All price gauging happens under the nose of a fully-established government entity that is supposed to ensure that government does not lose money to undue public procurement processes.

Government tenders have become synonymous with stomach politics, where instead of public officials protecting the bigger development mandate of taking care of every citizen, they have now turned into greedy incredible hulks that only care about how much money they can stash into their pockets.  Corruption has huge costs on the economy. The direct costs of corruption include the funds the public purse loses through misallocations or higher expenses and lower quality of goods, services and poor public works. The individuals and businesses paying bribes to secure government tenders recover their money by inflating prices; they bill crazy amounts of money for work not performed. If they do the work, in most cases they often do a shoddy job, neglecting contract and quality standards by using inferior materials. It’s no wonder government infrastructure quickly turns into ruins a year or two after completion.

Government does not really have an incentive to make sure that public procurement works as it is supposed to. If it loses money on overpriced capital projects and public services, government can simply increase tax to recover all the money it loses. It creates a vicious cycle, where taxes keep increasing to fund people’s pockets, who will in turn suck more money out of the system as tenderpreneurs. A big part of the private sector depends on government for business, and so both the honest and dishonest businesses suffer when government gets into a cash-strap and is unable to pay all its suppliers due to all the money it loses in overpriced tenders, among other corruption avenues that bleed the G-wallet dry. 

In the 2018/19 budget speech, government committed fiscal consolidation as a critical element of fiscal sustainability. In the planned fiscal adjustments and recovery strategies, government has to work on refining itself so that it ends up with the right size of the public sector that is able to make government more agile and efficient in delivering public goods and services. Dealing with the rot that is embedded in the public procurement processes should be a priority of the government expenditure and structural reforms that can ensure efficiency and accountability in the use of public resources.

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