Yasiin Mugerwa
16 May 2008
Kampala — In a bid to fight procurement corruption in public offices, the government has issued prices for common consumer goods that are clearly at odds with the surging market rates.
At the end of 2007, the Public Procurement and Disposal of Public Assets Authority (PPDA) compiled a 74-page list of common user items and average prices for suppliers and services, which it has now issued to accounting officers and those involved with tendering and purchases.
The document, seen by Daily Monitor, has identified 42 government suppliers, common user items and services - complete with a price list. Going by the list; the price of a bunch of bananas was set at Shs7,000, a kilo of rice at Shs1,500, indigenous chicken at Shs10,000, a loaf of bread at Shs2,000, a kilo of dry beans at Shs1,000, a kilo of maize flour at Shs1,000, and a kilo of meat at Shs3,000, among others.
Nearly six months after the PPDA made its price estimates, a bunch of bananas now costs at least Shs10,000, a kilo of maize flour is at Shs1,200, a loaf of bread costs Shs2,600, a kilo of rice costs Shs2,100, a kilo of beans is at Shs1,200, while a kilo of meat goes for Shs4,000.
PPDA's prices are not binding in the free market, but are likely to complicate the situation since government departments, both local and central, are big consumers in the market.
Prices of all food items have been soaring since the start of 2008 and especially so in recent weeks. It means PPDA might need to review that list sooner rather than later. But according to the procurement regulator, the new price benchmarks are binding to any form of government procurement.
"These new prices have been compared and certified by experts," the Executive Director of the PPDA, Mr Edgar Agaba said. "There has been a lot of distortion where entities use high prices as a conduit to abuse public funds through inflated prices."
The new prices, compiled by the PPDA and certified by Uganda Bureau of Statistics (Ubos), were released on Wednesday during the 8th Public Procurement Sector Review workshop at Imperial Royale Hotel in Kampala. "We have not fixed prices," Mr Agaba explained. "These are indicative prices and any slight increase will be understandable as long as it's not inflated to excessive levels in order to defraud public funds."
On May 5, Finance Minister Ezra Suruma rejected a plea by Parliament's Finance Committee to fix prices, insisting that the move would disrupt the economy. That stand is not likely to change, even as there are indications that the price increases are not slowing down. Mr Agaba insisted that the PPDA is mandated under Section 7 (n) of the PPDA Act of 2003 to "agree on a [price] list, which shall be reviewed annually, of works, services and supplies in common use by more than one procuring and disposing entity which may be subject to common procurement or disposal."
"There is a lot of corruption in procurement," Mr Agaba said. "This is basically the reason why PPDA has come out to stop any abuse of public funds and emphasise value for money. We are going to amend PPDA law and there is no turning back in the fight against corruption."
According to the World Bank, Uganda has lost about $300 million (Shs510 billion) annually since 2005 through corruption and procurement malpractices.
The 2005/06 Auditor General's report indicated that an estimated 20 per cent of the value of public procurement was lost through corruption, prompted by weak public procurement systems, yet procurement accounts for 70 per cent of public expenditure. PPDA publicist Dorah Egunyu said many government agencies have been relying on inflated price quotations by suppliers, leading to collusion and increased corruption in the procurement sector.
The Deputy Secretary to the Treasury, Mr Keith Muhakanizi, said setting the prices "is going to help us in enforcing accountability...we have been struggling with unit cost in budgeting for these ministries."
When a survey was done in December last year, according to the PPDA, it was found that many service providers and suppliers inflate prices. Mr Nandala Mafabi (FDC, Budadiri West), the chairperson of the Parliament's Public Accounts Committee, said the new measure has been long overdue. "There have been incidents of procuring junk equipment, counterfeit drugs, air-supply and delivery of shoddy work at national and local government levels," Mr Mafabi said. "They inflate prices with impunity and this is unacceptable because we are losing billions."
But Mr Julius Kapwepwe of Uganda Debt Network said the new indicative prices would not help serve their purpose if the government does not address political interference. "Politicians who interfere with procurement should be punished and exposed in order to promote transparency," Mr Kapwepwe said.
But Mr Agaba warned: "All government agencies should make reference to this list when preparing procurement plans and evaluating bids to ensure that the public procurement system delivers value for money."
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