A new digital procurement system processing all public tenders is set to change the face of ‘tenderpreneurship’ as Kenya knows it.
The National Treasury on Tuesday, August 10 invited local and foreign companies to bid for the development and operationalization of the system intended to curb corruption, tax evasion and money laundering among other financial malpractices. The system will be linked to the Kenya Revenue Authority (KRA), the Integrated Financial Management Information System (IFMIS), the Registrar of Companies and the National Council for Persons with Disability (NCPWD).
“The National Treasury invites sealed tenders from eligible candidates for the design, development, customization, supply, installation and maintenance of an electronic government procurement (e-Gp) system for the government of Kenya,” the public notice reads in part.
On the tax front, the creation of such a system will make it easier for KRA to track down the beneficiaries of state tenders accused of evading taxes. The taxman has been ramping up efforts to go after High Net Worth Individuals (HNWI) linked with tax evasion – increasing resources to its investigation and enforcement department and going on a recruitment drive to grow its workforce by over 6,000 in the next 3 years.
The link to the National Council for Persons with Disability (NCPWD) will enable easy verification of tenders allocated under programs which ensure People With Disabilities (PWDs) are guaranteed a share of opportunities to supply counties and the national government.
But the jury remains out on whether the introduction of the e-procurement system will be able to put a dent in the country’s high-powered corruption and mismanagement of public funds. Public confidence, in particular, has undoubtedly been eroded by the failure of other public finance digital systems including IFMIS to live up to promises of delivering greater transparency.
IFMIS, and its deliberate misuse and manipulation, has been at the center of numerous corruption scandal investigations since its introduction.
About Ksh11 billion was spent to set up IFMIS, which is essentially used to pay for services delivered to government agencies and disburse money to the 47 counties. Reports from the Auditor General have however unearthed numerous loopholes in the system that have helped facilitate loss of public funds.
For instance, unauthorized users have been able to easily gain access to the system as passwords did not expire and there were multiple duplicate vendor identities – which enabled some suppliers to get paid multiple times.
Some, including former ICT PS Bitange Ndemo who currently teaches at the University of Nairobi (UoN) School of Business, have speculated that such loopholes and oversights are deliberately built-into the systems to facilitate corruption despite the promise of transparency.
“ÏFMIS should have been in the cloud. The easy human intervention when one just needs to switch it off once every quarter to facilitate payments for orders outside the budget is something very deliberate,” Ndemo stated in 2019 while commenting on the Auditor-General’s report. “The beautiful thing about going digital is that the theft can be traced, digital footprints are not easy to erase,” he added.
Notably, the new e-procurement system will get rid of much of the paperwork which currently characterizes the procurement process in government.
But as to whether it will help stamp out corruption? Only time will tell.