Make procurement a strategic function to promote integrity


Kenya has come a long way in formulating procurement laws. PHOTO | SHUTTERSTOCK

Governments around the globe spend approximately $9.5 trillion each year in the procurement of goods, services and works.

Unfortunately, a good percentage of this money is lost to procurement malpractices and corruption.

A well-functioning public procurement system undoubtedly contributes to promoting a level playing field for the private sector, the financial institutions, the suppliers and the entire internal and external business ecosystem.

Through a multiplier effect, it creates employment and capital circulation within the economy.

Notwithstanding its contributions, most organisations still treat procurement as an administrative undertaking, rather than a core strategic function that can spur innovation.

In most government institutions, procurement is structured as an administrative activity with the head of supply chain reporting either to the head of finance or to human resources and not to the CEO as it happens with other departmental heads.

Regardless of the casualness with which procurement is treated, much is expected of it especially in the face of mounting economic uncertainty and when firms need solutions amidst loss-making.

Huge expectations are placed on procurement heads to source the best business solutions from their supply network partners and to achieve the innovation, value and services to boost sales.

Most governments in Africa have instituted reforms in public procurement by enacting legislation that has put in place new institutional frameworks, including the establishment of procurement authorities.

But the problem of corruption still persists.

In countries like Ghana, Uganda, and Kenya, the reforms have not been limited to regulations alone. They have public procurement processes, methods, procurement organisational structure, and even the workforce.

Transforming procurement into a strategic function allows organisations to collaborate more deeply with their suppliers to develop superior products and save billions in costs.

When procurement moves up from merely a support function to a strategic function, every step of sourcing and procurement takes on a new dimension.

The writer is a procurement and contract management consultant.

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