Kenya:Public Entities to Face Sanctions for Non-compliance

By Gift Briton

Public entities in Kenya that will fail to award at least thirty percent of their procurement opportunities to the youth, people living with disabilities (PWDs) and women, will have their bank accounts frozen for non-compliance.

This is set to take immediate effect should the new proposed bill by the National Treasury be approved by parliament to become law.

The bill in parliament seeks to allow the National Treasury to freeze all bank accounts for government entities that will not set aside 30% of tender opportunities to the above target group.

This will be done in an effort to enhance effectiveness of an affirmative action program launched by the government in 2013 dubbed Access to Government Procurement Opportunities(AGPO), that aims to facilitate enterprises owned by women, youth and PWDs to participate in government procurement opportunities.

Public procurement presents enormous opportunity to lift citizens out of poverty and spur growth for economies. However, gender inequality gap still exists in the tendering processes thereby locking women out.

“Currently there are no specific sanctions for not abiding with AGPO. But there are general sanctions for not abiding with the procurement laws,” Kinoti Muriuki, Principal economist at the National Treasury said during a policy maker’s roundtable on access to government procurement opportunities in Nairobi.

Kinoti Muriuki, Principal economist at the National Treasury

Additionally, despite government policy requiring that payment of AGPO tenders should be done within 60 days, compliance has not been equal across the board.

A study conducted by The Institute for Social Accountability (TISA) in partnership with Africa Freedom of Information Centre (AFIC) and Open Contracting Partnership (OCP) found that the non-adherence to prompt payment principle to AGPO tenders was one of the major challenges facing women led enterprises.

According to the research, government agencies can take up to three years to pay contractors which in most cases leads to cash flow challenges for the women led businesses and consequently leading to stagnation and /or collapse of most businesses.

According to Kinoti, the issue of unpaid tenders or pending bills has more to do with the morality of a procuring entity.

He says that most government entities have taken advantage of the loophole in the law that prohibits the office the Auditor General to access bank accounts of all public entities except that of Ministries and State Departments.

“Budget for any government entity cannot go through if there is no money to pay the contractors. The accounting officer should confirm that there are funds for that particular contract. So, if the payment takes more than two months, you will realise that the entity decided to divert the money which was meant to pay for tenders, to other urgent needs and that is where now payment problems begin,” he said.

“According to the law, in case a public entity has any pending payments, they need to write to the controller of budget on all those pending issues they want to pay.”

According to Kinoti, the controller of budget then approves that list of pending payments, and the list comes to the National Treasury for verification. It is finally sent to the Central Bank for the money to be released.

Unfortunately, he noted that after the money has been released to the entities, some again shift this money which was meant to pay the suppliers to other priority areas.

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