Building Ethical Procurement in Africa: The Crucial Role of Combining Legal Frameworks with a Culture of Integrity

Procurement in Africa will continue to play a pivotal role in shaping the continent’s development trajectory. This is because, unlike any other business function, procurement controls the "with whom" aspect of economic activity. This places a disproportionate amount of power in the hands of procurement professionals, to decide the demographics "with whom" the public and private sectors alike, do business with.

This significant influence, it would appear, has fallen victim to the age-old wisdom about absolute power corrupting absolutely.  In many African countries, procurement processes are often marred by corruption, lack of transparency, fraud, and favouritism. These issues are prevalent in both the public and private sectors, and they undermine economic growth, distort market competition, and perpetuate inefficiencies.

 

Public Sector Challenges

In Africa’s public sector, procurement corruption has often led to failed infrastructure projects, over-inflated costs, and the misallocation of public funds. A telling example of this fact is the National Youth Service scandal which involved the fraudulent loss of approximately $78 million through inflated procurement contracts, in Kenya. Similarly, in Nigeria, the procurement of medical supplies during the COVID-19 pandemic revealed significant discrepancies and overpricing, leading to public outcry and loss of trust in governmental institutions.

These cases highlight the pervasive issue of procurement fraud, where public officials and suppliers collude to manipulate tender processes for personal gain. This not only drains public resources but also deprives citizens of essential services and infrastructure.

 

Private Sector Challenges

In the private sector, procurement ethics are equally wanting. Unethical practices such as kickbacks, bid rigging, and conflicts of interest have consistently, severely impacted on the reputations and operational efficiencies of many companies. For example, in South Africa, the construction industry has faced numerous allegations of collusion and price-fixing among major firms during the construction of stadia for the 2010 FIFA World Cup. This not only caused real, tangible economic harm, but also eroded trust among international investors and tainted South Africa’s overall business environment – leading to protracted economic growth in the period following the 2010 FIFA World Cup scandals.

 

The Need for a Dual Approach

Addressing these ethical challenges requires a comprehensive and multifaceted strategy that prioritizes both a cultural reset and the strengthening of legal frameworks. This dual approach is essential to create an environment where ethical procurement practices can thrive, ensuring the integrity and transparency of procurement processes across the continent.

 

Cultural Reset

A cultural reset involves promoting a culture of integrity, transparency, and accountability within procurement functions. This can be achieved through continuous training and education for procurement professionals, emphasizing the importance of ethical behaviour and the long-term benefits of fair practices. Organizations should also foster environments where ethical behaviour is recognized and rewarded, and where whistleblowing mechanisms are in place to report unethical activities without fear of retaliation.

For example, Rwanda has made significant strides in combating corruption through its zero-tolerance policy and public education campaigns that promote ethical behaviour. The establishment of the Rwanda Public Procurement Authority (RPPA) has also helped streamline procurement processes and enhance transparency.

Education and training are also vital. Procurement professionals need to be equipped with the knowledge and skills to navigate complex ethical dilemmas. Training programs should focus not only on the technical aspects of procurement but also on ethical standards and best practices. Such programs can help build a collective of procurement professionals who are committed to integrity and empowered to make ethical decisions.

 

Strengthening Legal Frameworks

On the other hand, robust legal frameworks are essential to deter unethical practices and hold perpetrators accountable. This involves the enactment and enforcement of stringent procurement laws and regulations that mandate transparency, competitive bidding, and the ethical conduct of procurement professionals. In many African countries, however, the existing legal frameworks are either weak or poorly enforced, creating fertile ground for corruption and its accompanying cohort of maleficence.

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A great example of this, is Nigeria’s public procurement system, which perfectly captures how a poorly enforced legal framework can create fertile ground for corruption and inefficiencies. Despite having the Public Procurement Act (PPA) of 2007, which was designed to promote transparency, competitiveness, and accountability in public procurement, enforcement has been a significant challenge. In 2008, Nigeria’s Ministry of Health was found to have violated the PPA by not following due process in awarding contracts for the supply of vaccines and other health-related goods. The contracts were awarded without competitive bidding, and there were significant discrepancies in the contract sums. This case highlighted the lack of adherence to procurement laws and the ease with which they could be circumvented. For the most part, the PPA of 2007 is an effective legal framework which encompasses comprehensive procurement laws that clearly define procedures, roles, and responsibilities. These laws mandate transparency at every stage of the procurement process, from tendering to contract execution. However, from an enforcement point of view – the laws are wanting in numerous ways. The unfortunate truth about laws is that without rigorous enforcement mechanisms, even the most well-crafted laws can be ineffective.

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This is especially true in the procurement industry, where ordinary courts neither have the capacity, nor the unique expertise required to deal with procurement related deviations and disputes. It is crucial that the legislature understands that in order to strengthen any procurement legal framework and make it both meaningful and impactful, said framework needs to be supported by the establishment of independent regulatory authorities with the power to oversee procurement activities, investigate irregularities, and impose sanctions on those who breach the rules. South Africa’s Office of the Chief Procurement Officer, while with its challenges, has made significant strides in this regard - implementing measures to ensure compliance and penalize malpractice.

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Countries like Botswana have implemented strong legal frameworks that include independent oversight bodies to monitor procurement activities and ensure compliance with ethical standards. The relatively new Botswana Public Procurement Act is a prime example, overseeing procurement processes and providing a platform for addressing grievances and disputes.

 

Parting Thought

Procurement in Africa holds immense potential to drive economic growth and development. However, realizing this potential requires addressing the ethical challenges that plague both the public and private sectors. A dual approach that combines a cultural reset with the strengthening of legal frameworks is crucial. By fostering a culture of integrity and ensuring robust legal oversight, African nations can enhance the efficiency and fairness of their procurement processes, ultimately contributing to sustainable development and improved public trust.