1 Joint WTO/WB Regional Workshop on Procurement Reforms Overview of Procurement Reforms in Africa Bernard Abeillé Regional Procurement Adviser at the World bank January 14-17, 2003

2 Fiduciary Responsibility zWBs Legal Obligations : yThe Bank has a fiduciary responsibility to ensure that the proceeds of any loan/credit are used only for the purposes for which the loan was granted, with due attention to considerations of economy and efficiency, and without regard to political or other non- economic influences or considerations.

3 Fiduciary Responsibility zTo fulfil its fiduciary responsibility, the Bank has established detailed Guidelines zBasic principles governing the Banks Procurement Policies are : y Need for economy and efficiency y All eligible bidders have equal opportunity y Development of domestic contracting y Transparency in the procurement process

4 Current Trend includes zMoving from transaction-intensive fiduciary work to the development of sound national fiduciary systems y Sound public procurement policies and practices are among the essential elements of good governance zBeing prepared to work on Multi-Donor Budget Supports (MDBS), SWAPs and PRSCs zAppropriateness of Expenditures

5 Sound National Procurement Systems zTo ensure that sound national procurement systems are in place, the Bank carries out : yCapacity Assessments yCountry Procurement Assessment Reports (CPARs) : x Jointly with Government and other MDBs x Share its analysis/findings -- including risks x CPAR Recommendations, in general, lead to : An Action Plan, and A Procurement Reform

6 CPARs Follow-up zAs part of Country Dialogue & Capacity Building, the Bank: yDiscusses action plans yProvides grants to support procurement reforms yEstablishes triggers related to procurement as part of policy packages yOrganizes country and sub-regional Procurement Training Programs zSub-Regional Organizations will play a major role (WAEMU, COMESA …) zPartnership with other donors is growing rapidly in this area

7 Frequent Structural Problems Lack of public expenditures management systems/controls Lack of Procurement E & M systems Complexity of national procedures Slow process and weak absorptive capacity High unit prices -- resulting from various factors, in particular the evaluation by bidders of country specific commercial risks Lack of efficient, transparent and independent appeal mechanisms (to establish confidence an partnership with the private sector)

8 Frequent Deficient Practices Slicing and poor packaging of contracts Limited advertisement and insufficient competition Abuse of direct contracting as a response to critical situations Inadequacy of bid evaluation criteria Modification of bid evaluation criteria after bid opening Negotiations of terms and conditions of contracts after contract award

9 Key Principles for a good procurement system z Effective Advertisement (broad + sufficient time) z Public Bid Opening (immediate opening of all financial bids) z Well-formulated Bidding Documents y Bid Evaluation Criteria (non-discriminatory, disclosed, and in monetary terms) y Qualification of bidders reviewed separately y Contract Award to the lowest evaluated bidder -- without negotiations

10 Procedures should exclude: z Use of two-envelope systems (except for Consultants) z Use of merit-point system to evaluate bids (except for Consultants) z Combination of bid evaluation with qualification z Use of non-quantified bid evaluation criteria z Restricting access to bidding process

11 Modern Procurement Regulations z Loosing bidders must have an effective way to submit protests : y Protests submitted to an independent entity y Protests before contract award may lead to suspend the contract award decision y Protests after contract award may lead to compensatory damages z Contracting Entities : y Conducting bid evaluations are distinct from those having a regulatory/control functions y Have access to a series of standard documents and computerized information systems

12 Strategy for Efficiency Enhance accountability of contracting entities, but install independent audits + efficient controls + sanctions Eliminate steps and controls with no value-added Enforce the use of Procurement Plans Reconcile budget programming and contract execution Associate the private sector in the oversight of the procurement through their participation in: Control and surveillance Information systems Regulatory Body Appeal Mechanisms

13 Observatory of Country Procurement Reforms zThe Bank is maintaining for the Africa Region a Ranking Index of Country Procurement Reforms to monitor progress on: y Legal Procurement Framework & Regulations y Procurement Practices & Standard Tools y Institutional Capacity & Proficiency of Staff y Independent Control Systems & Appeal Mechanisms y Anti-Corruption Measures

14 Ranking Index of 27 African Countries Ratings# of Countries % 1-200% 2-300% % %

15 Why Procurement Reforms become so important ? zIn the past, donors procedures were used for the largest part of investments (>80%) zNow, with Multi-Donor Budget Support (MDBS), national systems are playing a growing role zThe Bank is ready to increase Proc. Review Thresholds (PRTs) if national systems are found acceptable zBetter national systems are performing, more donors are able to accept national procedures zProcurement Reforms are at the center of: y WB Country Assistance Strategy (CAS); and y PRSCs + MDBS

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18 End remarks Having sound national Procurement systems in place poses a tremendous challenge which requires sustained commitment on the part of political leaders + pressure from society

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