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12 March 2014 | Will Green
The African Development Bank (AfDB) is overhauling its procurement policy in light of comments that it is too complex and prescriptive.
The AfDB said its current policy was established in the early 1980s and the changes are required to help evolve the policy from one “designed for standalone large infrastructure projects” to one “capable of responding effectively and efficiently” to changing needs.
The bank also said a 1 per cent reduction in procurement costs across Africa would represent annual savings of around $3 billion (£1.8 billion).
The AfDB said its rules had been updated over the years to reflect changes such as a strengthening of borrower country’s procurement practices, increased transparency and the curbing of fraud and corruption, but their complexity had “limited their positive impact”.
In an approach paper on the overhaul the AfDB said: “The key to the effectiveness of the policy lies in its implementation. It is here that operational experience has highlighted delays in project execution from the use of these rules. The general perception is that the complexity and prescriptiveness of the rules, while reflecting the complexity of the procurement processes, has limited their positive impact especially in regional member countries that lack capacity and sound institutional, legal and governance systems.”
The review has in part being prompted by similar work taking place at the World Bank. A consultation period runs until 30 April with the new policy expected to be drafted by June and then put into place in early 2015.
The report said: “The resulting procurement policies, procedures and practices should continue the evolution of the rules from those largely designed for standalone large infrastructure projects, to one that is capable of responding effectively and efficiently to the needs of constantly improving public procurement systems in an Africa that is increasingly globalising on the one hand, while on the other there are fragile states that have recently emerged from conflict.”
Vinay Sharma, director of the bank’s procurement and fiduciary services department, said: “We expect this to bring about a transformational change, not only in how we do business, but also in how the countries themselves do their own public procurement. We hope this will actually catalyse the countries to review and examine very carefully their own procurement processes.”