Stealing a look at South Africa and Kenya’s procurement laws: What should Malawi do?

We all have dreams and visions of what we to be or achieve in life. Likewise, small and medium entrepreneurs crave for profitable results from their income generating activities or business establishments.

Mlomba: We need empowerment

Mlomba: We need empowerment

Suffice to say our country requires an economy that can meet the needs of all economic citizens – local investors and their enterprises – in a sustainable manner.

This, according to one economic expert, can only be possible if Malawi’s economy builds on the full potential of all persons and communities across the length and breadth of this country.

Further, no economy can grow by excluding any part of its people, and an economy that is not growing cannot integrate all of its citizens in a meaningful way.

As such, local investors desire an economy and “deliberate policies” that would meet the needs of small and medium entrepreneurs in a more equitable manner.

It is on this premise that the Indigenous Businesspersons Association of Malawi (IBAM) has been calling the government to put in place deliberate policies that would see locals getting more support by being given contracts in competitive bidding through fair competitions.

At the moment, according to IBAM President Mike Mlombwa, Malawians of Indian origin and foreign investors, who are said to have better financial muscle, dominate in International Competitive Bidding (ICB) and National Competitive Bidding (NCB) processes.

This has apparently led to low participation of the locals in these competitive biddings.

However, some locals—while groaning—requested government to borrow a leaf from the South African government’s policy—Black Economic Empowerment (BEE).

Black Economic Empowerment (BEE) Policy

BEE is a pragmatic growth strategy that aims to realise South Africa’s full economic potential while helping to bring the black majority into the economic mainstream. It is essentially a growth strategy, targeting the South African economy’s weakest point: inequality; It does not aim to take wealth from one group and give it to another, South Africa’s Department of Trade and Industry (DTI) says in its BEE strategy document.

Through its BEE policy, South African government aims to achieve the following objectives:

  • Empower more black people to own and manage enterprises. Enterprises are regarded as black-owned if 51% of the enterprise is owned by black people, and black people have substantial management control of the business.
  • Achieve a substantial change in the racial composition of ownership and management structures and in the skilled occupations of existing and new enterprises.
  • Promote access to finance for black economic empowerment.
  • Empower rural and local communities by enabling their access to economic activities, land, infrastructure, ownership and skills.
  • Promote human resource development of black people through, for example, mentorships, learnerships and internships.
  • Increase the extent to which communities, workers, co-operatives and other collective enterprises own and manage existing and new enterprises, and increase their access to economic activities, infrastructure and skills.
  • Ensure that black-owned enterprises benefit from the government’s preferential procurement policies.
  • Assist in the development of the operational and financial capacity of BEE enterprises, especially small, medium and micro enterprises (SMMEs) and black- owned enterprises.
  • Increase the extent to which black women own and manage existing and new enterprises, and facilitate their access to economic activities, infrastructure and skills training.

Likewise, Kenya’s Public Procurement and Disposal Act—while allowing competition among the eligible—prescribe preferences to “candidates such as disadvantaged groups, micro, small and medium enterprises.

According to Section 39, exclusive preference is given to citizens of Kenya where (a) [i] the funding is 100% from the Government of Kenya or a Kenyan body; and [ii] the amounts are below the prescribed threshold; (b) a prescribed margin of preference shall be given— [i] in the evaluation of bids to candidates offering goods manufactured, mined, extracted and grown in Kenya; or [ii] works, goods and services where a preference shall be applied depending on the percentage of shareholding of the locals on a graduating scale as prescribed.

“South Africans are doing fine as a result of BEE strategy as it associated with growth, development and enterprise development, and not merely the redistribution of existing wealth.

“We need such policies to better all sectors of the economy. Procuring entities should be preferring locals to foreign investors in as far procurement and competitive bidding is concerned,” said one local investor, who asked for anonymity.

While admitting that the level of participation of locals is low, government through the Ministry of Trade and Industry claimed that it is still committed to building capacity among local players.

According to the Ministry’s spokesperson Wiskes Nkombezi, government would come up with deliberate policies to boost their participation on the market.

Government, he claims, is designing policies that would see Malawians access more finance and capital for them to participate in the competitive market.

“Unless we have such policies local investors will continue to groan and face tough times on the market,” says Mlombwa.

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chalaza
Guest

muzipanga ma bussines a joint verture then mphinduso kugawana koma nsanje mufuna muwine nokha ndalama zochepa . poor malawi

Pata phiri
Guest

Mlombwa go n c chileka airport it started together with the new chineese stadium donation but look where is the stadium n chileka renovation which was contracted to a malawian.
Go n c rural areas 99% bars baasi so whom to blame and look at mulli a huge debt with bank

sedick
Guest

Malawi needs its own solution. A Malawi solution. There is no copy and paste in Africa. Each country needs to establish its own processes and systems. I am willing to train your people.

Antchona
Guest

South African BEE is an illusion that blacks can be intergrated into the main stream economy. As at it stands many blacks feel so much left out. What it has created is politically connected black people doing business with government. So if you have a good surname you stand a chance otherwise you can jump to the nearest lake. That cannot be called economic emancipation. Am sorry i differ totally.

Matokoso
Guest

Find something better to write about. BEE is a sham through and through

Concerned Citizen
Guest

Tiyeni tizingochitapo apa palibe chingatheke ku Malawi njala nthenda nsanje.

nantini
Guest

We Nyasas have a problem, we are mostly introvert and always leave tough things to be done by others. But when it comes to chewing to what others have sweated for, are in the fore front. Such type of culture will never develop into competitive minds. That is why we fail to compete in such bids. Even if we win one tender we never save for tomorrow but chew, marry and drink our lungs out. What development can come out of such pathetic mind set.

Bahasa
Guest

WhoIs the secretary general of IBAM

makito
Guest

Very shallow and one sided analysis. Is BEE really working in SA? Are the conditions the same?

phaka
Guest

I gree with big man….in south all companies r BEE & their company regisration name r in black south african

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