Why are foreign firms winning more high-value tech contracts in Uganda?

5 August 2021

 

Foreign suppliers are winning the most valuable government contracts for digital technology systems (DTS) in Liberia, Uganda and Nigeria while local vendors miss out, a new report has found.
The study by the Africa Freedom of Information Centre (AFIC) said lack of technical expertise and financial muscle meant contracts for biometric artificial intelligence and facial recognition technologies were largely going to non-domestic firms.
In Uganda in 2015-2016, for example, a huge 71% of public DTS contracts were awarded to local companies, but contracts awarded to foreign businesses were far higher in value, worth nearly 25 times as much overall.
The report also criticised a lack of transparency in government procurement processes in the three countries.
It said a lack of technical know-how among government contracting staff has meant they are often unable to understand the merits of respective bids so have resorted to direct procurement.
This has increased the risk of inflated prices and corruption in contracts, but has also left many local firms following proper processes unaware that the contracts have already been awarded.
Gilbert Sendugwa, AFIC executive director, said: “If you look at transparency, very few local companies get information on (government) procurement plans.
“Less information makes the firms miss participation, but there’s also a challenge of low capacity of local firms to supply DTS.”
He said government electronic procurement portals often had no information on procurement plans for DTS.
A survey across the three countries of an undisclosed portion of the public found that respondents in Nigeria were the most aware of government DTS procurement, followed by Ugandans and Liberians.
“Public procurement in Africa is characterised by low information disclosure, lack of transparency, inflated pricing, inefficiency and poor use of competitive bidding in procurement processes,” the study concluded.
Wherever possible, governments in Liberia, Uganda and Nigeria should promote open bidding in DTS procurement as this would ensure greater value for money and innovation, it recommended.
It also criticised the fact that fewer than 1% of the value of DTS contracts are disclosed publicly, making it difficult to improve efficiency and transparency.

Foreign suppliers are winning the most valuable government contracts for digital technology systems (DTS) in Liberia, Uganda and Nigeria while local vendors miss out, a new report has found

The study by the Africa Freedom of Information Centre (AFIC) said lack of technical expertise and financial muscle meant contracts for biometric artificial intelligence and facial recognition technologies were largely going to non-domestic firms.

In Uganda in 2015-2016, for example, a huge 71% of public DTS contracts were awarded to local companies, but contracts awarded to foreign businesses were far higher in value, worth nearly 25 times as much overall.

The report also criticised a lack of transparency in government procurement processes in the three countries.

It said a lack of technical know-how among government contracting staff has meant they are often unable to understand the merits of respective bids so have resorted to direct procurement.

This has increased the risk of inflated prices and corruption in contracts, but has also left many local firms following proper processes unaware that the contracts have already been awarded.

Gilbert Sendugwa, AFIC executive director, said: “If you look at transparency, very few local companies get information on (government) procurement plans.

“Less information makes the firms miss participation, but there’s also a challenge of low capacity of local firms to supply DTS.”

He said government electronic procurement portals often had no information on procurement plans for DTS.

A survey across the three countries of an undisclosed portion of the public found that respondents in Nigeria were the most aware of government DTS procurement, followed by Ugandans and Liberians.

“Public procurement in Africa is characterised by low information disclosure, lack of transparency, inflated pricing, inefficiency and poor use of competitive bidding in procurement processes,” the study concluded.

Wherever possible, governments in Liberia, Uganda and Nigeria should promote open bidding in DTS procurement as this would ensure greater value for money and innovation, it recommended.

It also criticised the fact that fewer than 1% of the value of DTS contracts are disclosed publicly, making it difficult to improve efficiency and transparency.

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