IMPACT OF REGIONAL PROCUREMENT REFORMS ON THE DEVELOPMENT OF A NATIONAL PRIVATE SECTOR Ms Carole Kariuki Acting CEO of the Kenya Private Sector Alliance (KEPSA) High Level Forum on Public Procurement Reforms in Africa -Tunis, 16 November 2009

History of Public Procurement Reforms in Kenya 1963 – 1969: British system, under the responsibility of Crown Agents 1969 – 1978: Circulars, under responsibility of Treasury/Government of Kenya (GoK) 1978 – 1998: first Supplies Manual; dictated the procurement function within gov’t but not local authorities; schools; institutions 1998: Country Procurement Assessment Report, 1998 – World Bank

History of Public Procurement Reforms in Kenya (continued) World Bank Study:  Public procurement regulations through Exchequer & Audit (Public Procurement) Regulations, 2001 – abolished Central Tender Board (CTB)  Created Ministerial Tender Committees  Broadened the scope of ‘public entities’ to include schools; colleges; universities; cooperatives; and local authorities  But these were still only Regulations  Public Procurement & Disposal Bill drafted, and modified several times

History of Public Procurement Reforms in Kenya (continued) Public Procurement and Disposal Act 2005: Operational 1 January 2007 Main features – establishment of the Public Procurement Oversight Authority and the Public Procurement Review Board (to preside over the bidding system) Improvements – variations limited to 15% and problems of ‘air supply’ addressed by systems of committee decisions and guarantees

Regional/International Influence on National Procurement Reforms ‘Best practice’ developed using World Bank processes and funding; plus involvement of development partners Public Procurement and Disposal Act based on standard procurement law (UNCITRAL) Adopted by many African states ie Ghana; Tanzania; Uganda Some regional variations

Benefits for the private sector Openness Transparency A ‘level playing field’ Governance Reduction in corruption Expansion of business opportunities

Challenges Constraints on capacity (submission of tenders and tender documentation)  Need for training/capacity building  Sensitising SMEs on ‘rights’  Empowering youth sector ie Kazi Kwa Vijana programme WB concerns – still discriminatory regarding local preference schemes and reservations under $700,000

Development of an East African Procurement Law East African Procurement Forums held in 2008 and 2009  Peer learning forum  Sensitise local private sectors  Towards the development of common procurement law  Procurement Manual for the East African Community to be tabled by end 2009 – for adoption by mid 2010

Features/Benefits of Regional Procurement Manual Will introduce regional preference schemes Best And Final Offer (BAFO) in the case of a tie – a new approach  The Kenyan private sector will benefit through their competitive edge  5-year ‘tax equalisation’ period across the region will end at the same time  Larger market  Sectors – transport; banking etc

In pursuit of an enabling business environment….. Thank you Any questions? Carole Kariuki, Acting CEO Kenya Private Sector Alliance (KEPSA) P O Box 3556 – Tel: /2 Fax: