E-procurement could help Malawi seal loopholes

As Malawi is reeling from the effects of Cashgate, professionals in the procurement and supply chain management have thrown their weight behind the introduction of e-procurement, a system that could seal loopholes in the buying of goods, works and services.

The anticipated introduction of e-procurement—a system in which all procurement processes up to payment are automated—could be one of the ways to curb corruption that is prevalent in procurement, experts have said.

Procurements in public as well as private institutions account for more than half of the budget because organisations are always procuring goods, works and services throughout the year, ranging from plant and equipment, electronic gadgets to consultancies.

Malawi Institute of Procurement and Supply (Mips), a grouping of procurement and supply chain management professionals, argued that e-procurement could ensure all procurements in public and private sectors are accounted for.

“If we are managing an e-procurement system, we could account from the time budgets are set, when procurements are being initiated and the right specifications. Other advantages include reverse auction, electronic tendering that could assist to account for whatever is being procured,” said Mips president Azikiwe Mussa Mbewe in an interview.

He said in this set up, a clear data base could be formulated and that any payment to be effected will have to go through the procurement cycle; hence, curbing malpractices.

“When it comes to payments, it means one will be paying for something that has been received.

“With the system we have been running, you can forgo some things because there is nothing to stop [the malpractice] as the larger part of procurement process is being done manually,” said Mbewe.

He, nonetheless, said despite e-procurement being an expensive venture, there is need to invest in the system because it could be the solution to all the problems associated with procurement that the country is grappling with and could save more than what is spilled.

The Office of Director of Public Procurement (ODPP), a government agency that handles all public procurement deals, agrees that e-procurement could indeed reduce incidences of corruption prevalent in procurement and supply chain management.

“Principally and internationally, e-procurement reduces fraud and corruption to a great extent. We have been trying to see if we could get on board e-procurement for some time now,” Arnold Chirwa, assistant director in the ODPP told Business Review on Tuesday.

“In fact, in Ifmis [Integrated Financial Management Information System], there is a module on e-procurement. Between 2008 and 2009, we convinced the donors for us to activate the module. But after a study financed by the World Bank, we found out that the module is not suitable for the whole public procurement system. It was suitable for small companies with less transaction.”

Chirwa said thereafter, government conducted an e-readiness study to gauge whether Malawi is ready for e-procurement in view of the module in Ifmis not suitable for the ODPP.

He said currently, the African Development Bank (AfDB) are funding the procurement of information technology equipment and other accessories for e-procurement which will be delivered in November this year to be rolled out in the next financial year.

“E-procurement cannot be done as a one-off project. It has to be piloted and phased. We have to start with a particular ministry or agency. We also have to identify a consultant to look at the modus operandi,” said Chirwa.

On his part, economics professor at University of Malawi’s Chancellor College Ben Kaluwa said on Monday, e-procurement could also curb situations in which suppliers inflate prices or paid for goods they have not delivered.

“In most cases, particularly in government, it has been common for some businesses to be paid for goods not delivered. Sometimes suppliers could deliver goods that were not agreed in the contract,” he said.

Literature on e-procurement indicates the system consists of e-tendering, e-auctioning, vendor management, catalogue management, purchase order integration, order status, ship notice, e-invoicing, e-payment and contract management.

Many countries worldwide have placed major focus on e-procurement as part of their strategies. In Africa, Ghana, Rwanda and Kenya are successfully implementing e-procurement which has reduced incidences of corruption, resulting in the countries shinning on the World Bank Doing Business Index.