World Competition Day

December 05, 2014

Competition Issues in Public Procurement

December 05, 2014

The Competition and Consumer Protection Commission (CCPC) says, the World Competition Day is the day when we all should join hands with policy makers, government and the media in coming up with a common ground on how to deal with the competition issues in Public Procurement processes.

And Yusuf Dodia, Board Member, Consumer Unity and Trust Society- CUTS International Lusaka said, Competition is a fundamental tenet of a well-functioning economy and encourages companies to provide consumers with the products and services that they want at lower prices, ensure better quality of service and stimulates innovation and also coerces businesses to be efficient.

They were speaking during the commemoration of this year’s World Competition Day on 5 th December 2014 under the theme “Competition Issues in Public Procurement”.

Mr. Kelvin Fuba Bwalya, Board Chairperson of CCPC in his speech mentioned that promotion of competition is not aimed at hindering business growth but at creating a conducive market environment for all players in the economy. He said that public procurement is an important aspect of government expenditure that enables the government to purchase goods and services for enhancing its service delivery to the general public

“Among the most serious breaches of competition law are cartels involving price fixing, collusive tendering and market sharing. The process of public procurement in small economies like Zambia is also not immune to the pernicious effects of cartels and other anti-competitive practices” he added.

He further said, it is important that the procurement process is not distorted by such practices as they cause adverse economic implications such as loss of efficiency and diversion of money away from developmental programmes. Lack of transparency and discrimination in tenders makes it difficult to implement procurement policies. He therefore provoked and challenged the media to break the boundaries that cause limitations in addressing these issues and encouraged institutions such as the National Prosecution Authority and investigators to get to the root of these issues.

Meanwhile, Mr Yusuf Dodia said that this year’s theme was timely as public procurement processes have a direct bearing on social gains for both producers and consumers. It is becoming common ground that public procurement holds a complex relationship with market competition and that consequently, a tighter link between public procurement and competition law enforcement needs to be established, he said.

Dodia added that Zambia has not been an exception to this complex issue. In recent years recurring reports have been noted pointing to the fact that some public procurement has been marred with underhand and corrupt processes. The Auditor general reports, year in year out, have pointed to the fact that a number of process go without competitive tendering processes despite this being permitted in Zambia Public Procurement Authority Act. This is an area which has become a fertile ground for abuse and tightening monitoring and surveillance for tenders that hardly require bidding processes is required, he explained.

He said, CUTS believes that curtailing these activities would play a key role in creating an enabling environment that guarantees free contestable markets, transparent procurement processes and poverty reduction. We are therefore happy that, in Zambia efforts have ensued between CCPC and ZPPA. Such efforts ought to be nurtured further, perhaps through, a better policy and legislative link.

In view of this, he said CUTS is in the ring and we will compliment as much as we can in our small way, stressing that Competition Policy and Law are tools which can prevent or deter collusion in public procurement resulting in generating relevant savings for the government that could be used to boost its expenditure portfolio.

Naomi Fulaza, Chief Investigator, Cartels and Restrictive Business Practices- CCPC, in her presentation stated that the government spends a lot of money in the procurement of goods and services every year.

Fulaza said that practices such as bid rigging and market allocation are detrimental to the economy as resources are not efficiently utilised because the government usually pays too much for goods and services and they diminish public confidence in the competitive process undermining the benefits of a competitive market place.

On the other hand, Mrs Phiri, a representative from the National Prosecution Authority (NPA) stated that in trying to address this issue, we must understand that this is an interconnected issue that the CCPC cannot handle alone. With procurement issues comes in issues of corruption and money laundering therefore institutions need to work together and play their respective roles. She added that competition law in Zambia is not yet well developed and very few cases go to the courts of law, therefore there is need to also bring the judiciary on board.

While giving closing remarks, Ms Luyamba Mpamba, Director Mergers and Monopolies at CCPC emphasised on the need to strengthen cooperation among agencies and stakeholders if such abuses are to be addressed.

Mpamba, thanked CCPC Board Chair and CUTS Board member, the National Prosecution Authority and the Media for taking time to come and commemorate this day.

For more information, please contact:

Pradeep S Mehta, , +923165538155