Indigenous businesses Lose out procurement
Minister of Trade Sosten Gwengwe says indigenous Malawians are not benefiting from public procurement despite available regulations for preferential treatment.
The minister said this in Blantyre during a consultative meeting for Public Procurement and Disposal of Assets Authority (PPDA) on Administration of Preferential Treatment Regulations 2020 and PPDA Participation by Micro, Small and Medium Enterprises Order 2020.
Gwengwe said the unequal sharing of the procurement ‘national cake’ has been glaring over the years, disadvantaging indigenous black Malawians.
He cited the just-ended financial year in which out of the K600 billion government procurement budget, less than 15 percent was taken up by black indigenous Malawians.
Said the minister: “The trend has existed for so many budgets and has created glaring economic inequalities in our society.
“The 2017 PPDA Act was passed to address this apparent economic injustice.”
The preferential treatment provision is provided for under Section 44 (10) of the PPDA Act, which compels procuring and disposing entities to award 60 percent of all contracts under national competitive bidding to indigenous black Malawians and the remaining 40 percent to others.
While domestic preference is a long-standing provision in Malawi’s public procurement legal framework, the 60/40 provision is new and imbedded in the PPDA Act.
The PPDA has since drafted the Public Procurement and Disposal of Assets Authority (on Administration of Preferential Treatment) Regulations 2020 to operationalise and offer guidance on the implementation process of this provision.
In an interview, PPDA director general Ellias Hausi said the existing regulations seek to address inequalities, especially with regard to participation by black indigenous Malawians in public procurement.
“It is hoped that implementation of these regulations will raise the profile of indigenous black Malawians and level the playing field for all that participate in public procurement,” he said.
On his part, Indigenous Businesses Association of Malawi president Mike Mlombwa said with these policies, indigenous businesspersons will be empowered as the preferential regulation is not working.
Under the PPDA Participation by Micro, Small and Medium Enterprise Order 2020, small and medium enterprise means a business comprising at least annual turnover of between K50 million and K500 million, has between 20 and 99 employees or has maximum assets, excluding land and buildings in the case of manufacturing enterprises, of K250 million.
