15 January 2013

Tanzania: How 10 Percent Syndrome Eats Up Procurement Sector

THE 10 per cent syndrome in procurement sector is a major challenge facing the nation in the fight against corruption.

The Public Procurement Regulatory Authority (PPRA) Chief Executive Officer (CEO), Dr Ramadhani Mlinga, said instead of negotiating for the prices to go down, public officials add a 10 per cent on the original price which goes into their pockets.

Presenting a paper during a one-day workshop on Understanding Public Procurement process in the country to Members of Parliament in Dar es Salaam, Dr Mlinga noted that the trend of adding 10 per cent on commodity prices during procurement is widespread in the country.

"The 10 per cent goes into the pockets of those conducting procurement, this is a big challenge to the nation that we need to address by enforcing the procurement Act," he explained. He noted that the procurement is one of the sensitive sectors of the government with challenges of grand corruption.

"There is a lot of taxpayers' money getting lost through procurement and without proper strategies to control and monitoring systems; procurement could easily turn into a bottomless pit for national resources to the detriment of the nation's economy.

Dr Mlinga noted that statistics compiled by PPRA on procurement show that in 2007/07; 148 Public Entities spent 1.8 trl/- in procurement, in 2010/11; 315 public entities spend 4.52trl/- while in 2011/12; 319 public entities spent 4.32trl/-.

Tanzania Electric Supply Company Limited (TANESCO) leads the pack in money spent on procurement, totalling 933.5bn/-, followed by the Tanzania National Road Agency (TANROAD) with 622.5bn/- and the least is the National Audit Office with 20.4bn/-.

Dr Mlinga explained that public procurement is guided by five principles which are value for money, transparency and accountability, ethics and fair dealings, open and effective completion and equity, which he noted are often not adhered to by public entities.

The CEO noted that the establishment of the authority is government's own effort to bring about fiscal discipline in funds spent on public procurement and to foster and promote value for money for national development.

On his part, the Dar es Salaam Mayor, Dr Didas Masaburi, stressed that corruption and fraudulent practices in procurement process are major challenges despite strategies by the government to address the problems.

He noted that studies show that institutions lose 5 per cent of its revenues through fraud and executives and owners of organization are the major culprits, committing more than 9 times of fraud cases compared to normal workers.

Dr Masaburi noted that among areas that are embroiled in corruption include waste management, where procurement process costs are shouldered by the government. He explained that the government should enact a law to protect whistle blowers, who snitch on those demanding bribes including the 10 per cents, so that they can be protected.

"We have seen similar cases in the United States, where people who give up incriminating evidence against others are protected by laws... this could help in curbing corruption not only in the procurement sectors but other areas as well," Dr Masaburi noted.

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