Uganda

1. CHALLENGES AND LESSONS LEARNED FROM THE PARTICIPATION OF THE PRIVATE SECTOR IN PROCUREMENT REFORM IN UGANDA Presented at the high-level forum on public procurement reforms in Africa: Sustaining Economic development and poverty reduction through the current Economic Crisis. 16th -17th , November 2009 Tunisia Mme. Janepher SAMBAGA

2. Uganda Population 30 million Area 241,000 square kilometres 2

3. UNCCI(Uganda National Chamber of Commerce and Industry) and PPR in Uganda UNCCI exists to advocate for Uganda's business community It is the Oldest (Since 1933), largest (over 10,000 members) and only nation-wide (with district branches) umbrella private sector organization in Uganda. UNCCI has participated in public procurement reform forums Like; • National Stakeholders workshop on Integrity Pacts for procurement reforms; August 2009 raised issues paper to parliament. • National tendering and procurement skills training UMA conference hall, lugogo July 2009 raised issues to Government • National stakeholders meeting to discuss and draw advocacy issues on the PPDA providers register August 2009 organized by USAID • National stakeholders meeting on ways and means to fight corruption in business: the Ugandan experience. April 2009 organized by transparency international Uganda; discussed and informed the process • Workshop on ethics in service delivery: understanding the private sector and corruption in public procurement reforms Uganda April 2009

4. The role of the private sector in PPR in Uganda The private sector ensures that the objectives of the PPR in Uganda are transparent and favourable to the business community. ILO 2002 (5,600,000/-) Reforms started in 1997 with a Task Force aimed at: • Transparency and Accountability - to fight waste and corruption • Fairness/ Equal opportunity for all in the bidding process • Integration of the public procurement system with public financial management framework` • Providing a more attractive investment climate by lowering risk • Maximising competition to satisfy customer needs and ensure value for money • A streamlined procurement process through the gradual adoption of electronic commerce

5. Challenges of the private sector in PPR High cost of doing business • Samples cost a lot of money, over $500 • Bank guarantees tie down the service providers’ investment capital • The cost of buying the pre-qualification document is very high. • The price quoted is always fixed. • The requirement for a tax clearance certificate • High interest rates (e.g. 18% – 30%)

6. Financial Framework • Some national bidders find the 10% requirement for bid bond too high. • Capacity to raise credit, bid bonds and securities from local banks is lacking. • Bid securities are expensive and prohibitive for example; certified cheques.

7. Low capacity of the private sector to profitably participate in PPR. • Most Service Providers can hardly understand bid documents. • Procurement procedures are irrational and cumbersome. • Unfamiliar procedures render the process open to abuse.

8. Corruption • Corruption adds up to 10% to the total cost of doing business globally, and up to 25% to the cost of procurement contracts developing countries. • Procuring officials in government have brief case businesses. • There is evidence of malpractice commonly known as the “kitu kidogo” or “speed money”. • There are indications that over and under-invoicing in imports and local procurement are common practices. • Information about pre-qualifications is not open to the public;

9. Corruption • Competent private enterprises are disqualified under false allegations. • The stringent prequalification criteria • Rigid procurement process. • Open bidding is not favourable to the private sector. • Poor communication hinders transparency • The absence of a law that provides protection for intellectual property • The presence of counterfeit products

10. LESSONS LEARNED AND WAY FORWARD • The need to build capacity for the private sector coupled with enforcement of rules and concerns is still great. (H) • There is need for a policy on refund on investment capital after a contract has been cancelled. • There is need to build private sector capacity in fighting corruption. • The need for laws and policies governing intellectual property. • The need to scrap internal opening of bids. • The private sector needs a dialog and networking platform

11. References • The Cost Of Corruption For Infrastructure DevelopmentIn Africa By Eng. M. R. Meghji (P.E., FASCE, FICE)President – Institution of Engineers Tanzania (2001 – 2003)Exco – FIDIC (1999 – 2003) • M&S VENTURES The cost of corruption Issue 21, February - May 2005, James Hall • Mr. Kalanguka-Kayondho. Task Force Report on PPR to the Government in March 1999 –Uganda • National Integrity Systems, Transparency International Country Study Report Uganda 2003 • PPDA at the 3rd OECD-DAC Joint Venture on Procurement held in Arusha, Tanzania 5th - 7th May 2008 • UNBS( Uganda National Bureau of Standards) • UNDP's Programme for Accountability and Transparency • Unilever Uganda • National Stakeholders workshop reports highlighted above.

12. Thank You for Your Attention