By Timo Shihepo

Copyright namibian

A New public procurement regulatory authority is set to be established under a new tender regime that could also bar minors and companies linked to the same household from bidding for government tenders.

The new agency, according to the draft public procurement amendment bill, will be headed by an executive director who would have the authority to enforce compliance, investigate complaints, debar suppliers, and set standards for procurement officers.

The bill is currently undergoing nationwide consultation amid concerns that some proposed changes could open the door to widespread corruption through exemptions.

The amendment bill will replace some parts of the current law that has existed since 2015 and which established the Central Procurement Board of Namibia (CPBN), an institution that currently adjudicates tenders.

Some have hailed transparency clauses in the proposed bill, such as the crackdown on hidden ownership by broadening the definition of “prominent influential persons” and forcing bidders to declare the assets of spouses and children.

The proposed law intends to create a public procurement regulatory authority as an independent body, with the draft bill stating that “the [finance] minister must appoint a suitably qualified person to be the executive director of the authority on such terms and conditions as the minister may determine, following an open, fair and transparent prescribed process of invitation, interview and recommendation by a recruitment committee”.

The executive director of the authority will be tasked with the management and operations of the authority, the management of the funds, property and business of the authority, and others.

“The authority must be independent and must act without improper or undue influence and without fear, favour, prejudice or direction from any person or authority,” the bill says.

The watchdog gets the power to investigate and issue fines of up to N$5 million or a jail sentence of 10 years.

Government institutions will now have 14 procurement methods to choose from, up from eight, including community-based procurement, and direct sourcing from manufacturers.

A new clause requires justification when open bidding is bypassed.

In 2023, the government awarded a N$1.3-billion pharmaceutical tender to Cospharm Investment, a company which was mainly owned by a child (5) and her Zimbabwean father, Cosmas Mukaratirwa.

Now there is, however, a proposal to block this.

A clause in the procurement bill proposes that “the majority equity owned by Namibian citizens in an entity, cooperative, trust, partnership, joint venture or similar arrangement as referred to in subsections (1) and (2) must be owned by Namibian citizens that have reached the age of majority in terms of Namibian laws”.

Namibia’s majority age is 18 – the legal threshold at which a person gains full legal rights and responsibilities.

Experts, however, warn that this clause might not survive a legal challenge, especially since the Constitution gives every Namibian citizen the right to practise any trade.

Under the bill, bidders who performed poorly on previous public contracts must be disqualified by the CPBN or relevant public entities.

A bidder of which the shareholder has a financial interest in another bidder participating in the same process would also be disqualified.

Other clauses also block bidders from the same household.

One states: “If two or more bidders participating in the same procurement proceedings are owned by individuals residing in the same household, regardless of whether they represent separate legal entities . . . for the purposes of this paragraph, ‘same household’ must mean individuals who share a residential address or are otherwise in a domestic relationship that may reasonably give rise to a conflict of interest or the potential for collusive behaviour.”

In 2022, the CPBN disqualified the Nekomba brothers Herman, Erastus and Jacob (‘Jacky’) from competing for a N$382-million school food supply tender.

They later dragged the government to court, arguing their disqualification from the tender was unlawful.

The High Court agreed, asserting their right to fair, lawful, and reasonable treatment in the procurement process.

The bill tightens thresholds and bans the practice of splitting tenders to avoid scrutiny. Contracts above certain values must undergo legal review before signing.

This directly addresses the practice of rushing through tenders to escape oversight.

There is also a plan to create a special procurement court to be established within the High Court to fast-track disputes, with decisions required within 30 days or 14 days for essential goods like medicine.

Researcher Frederico Links says the introduction of a procurement court implies a sense of failure.

He says the failure involves existing dispute resolution measures and profoundly unrealistic expectations of the review panel mechanism in the public procurement process.

“The procurement court is now billed to become the missing piece that would finally contribute to unlocking efficiency, along with other legal and institutional reforms proposed to strengthen the public procurement system for it to become an enabler of optimal government service delivery and socio-economic transformation and inclusion,” Links said in the 27th edition of the ‘Procurement Tracker Namibia’.

“The experiences of other countries with procurement courts or tribunals indicate they might not be as efficient,” he said.

Concerns have been raised that giving the finance and other ministers sweeping powers could leave room for corruption.

Details about the proposed changes to the law also come at a time when there are widespread concerns that the government intends to use widespread exemptions for tenders linked to Swapo’s N$85.7-billion economic turnaround implementation plan.

Political analyst Ndumba Kamwanyah says the proposed declaration of assets by bidders and the prevention of children being used as proxies or fronts for individuals to obtain tenders is a good practice in terms of promoting good governance.

“Where I am not comfortable is with the suggestion that the minister will have the sole mandate to set rules on how the government purchases medicine directly from manufacturers.

“There must be checks and balances; the minister should not have the sole authority to decide how public resources are distributed.

“We must learn from the Fishrot scandal. That’s exactly what happened when the Marine Resources Act was amended to give the minister more power to allocate fishing quotas,” he says.

Popular Democratic Movement secretary general Manuel Ngaringombe says his party supports the proposed amendments, saying using children as fronts for company ownership is a violation of the law, as children do not have the legal capacity to act.

Ministry of Justice and Labour Relations spokesperson Edmund Khoaseb yesterday said the bill is still at the consultation stage.

“The public procurement bill is under the finance ministry. But remember, it is only a bill at this stage, not law,” he said.

The Ministry of Finance said it is conducting regional stakeholder consultations from 15 September to 4 October.

During this period, the ministry also invites the public to review and provide feedback on the proposed amendments of act.