BUSINESS MAVERICK OP-ED

Call for government to open procurement data to public scrutiny

By Hopolang Selebalo, Zukiswa Kota and Daniel McLaren for Imali Yethu 14 June 2019
Caption
Stack of South African Rand. Photo: Adobe Stock

Public contracting is the meeting point of significant power and money and in most countries, these systems are characterised by convoluted, opaque planning. According to a recent report by the Open Contracting Partnership, up to 20% of state procurement budgets for infrastructure may be wasted. Opening procurement data will help support public participation and foster accountable governance.

In February 2018, the erstwhile Minister of Finance launched South Africa’s first national open budget data portal, Vulekamali. This is an initiative between a coalition of civil society organisations known as Imali Yethu (“Our Money”), and the National Treasury.

The online portal aims to create greater transparency around public budget processes, as well as enhance civic participation. One of the key purposes for the development of this resource is to open up government performance and procurement data and in turn deepen accountable governance. Vulekamali has the potential to bring greater transparency to public procurement processes and to benefit both the public purse and service delivery alike.

The significance of monitoring public procurement cannot be overstated – Transparency International estimates that governments in African and other low to middle-income countries spend approximately 50% of public funds on procuring goods and services. In high-income economies, this equates to 30%. It is no surprise, therefore, that public procurement systems are highly vulnerable to corruption, leading to the mismanagement of public funds and malfeasance.

In November last year, Auditor-General (AG) Kimi Makwetu released his 2017/18 consolidated general report on government expenditure. The AG found that irregular expenditure by national and provincial departments, as well as some state-owned entities (SoEs) amounted to approximately R51-billion. Irregular expenditure is spending which does not comply with the Public Finance Management Act (PFMA). Some of the reasons behind this exorbitant figure include non-compliance with procurement laws and unfair procurement practices.

It is for these reasons that the Imali Yethu coalition is advocating for the release of government procurement information through Vulekamali. Organisations in the coalition have indicated how opaque procurement processes hinder service delivery and damage trust in the public service. As Justice Johan Froneman succinctly articulated in a 2013 Constitutional Court judgment against the South African Social Security Agency (SASSA), “…it is because procurement so palpably implicates socio-economic rights that the public has an interest in it being conducted in a fair, equitable, transparent, competitive, and cost-effective manner”.

According to the Open Contracting Partnership, open contracting relates to “…publishing and using open, accessible, and timely information on government contracting to engage citizens and businesses in identifying and fixing problems”. A significant component of this is ensuring that data users such as journalists, civic actors and members of the public are included at every stage. In some countries, there is a growing emphasis on gender-equitable procurement and contracting.

There is no time like the present for the South African government to chart a decisive path towards implementing open contracting standards.

For some members of the coalition, such as Equal Education (EE), Equal Education Law Centre (EELC), the Public Service Accountability Monitor (PSAM) and Section27, the slow pace of school infrastructure delivery in provinces such as the Eastern Cape, has been of significant concern for several years.

In this case, school infrastructure delivery has been out-sourced to Implementing Agents (IAs) who act as project managers for the government. While the key performance indicators of IAs are clear, civil society and the public are unable to compare the actual work of IAs against them due to the lack of publicly available IA performance information. This information is tracked in documents such as User-Asset Management Plans (U-AMP). The U-AMP contains a project list with budget information for each school, but it is not released on the Department of Education’s website. This makes it difficult for the public and for communities to track which schools have been allocated to a particular IA. These documents should be made publicly available. Adopting open contracting across all sectors and opening up procurement data by default is therefore crucial.

It is thus encouraging to note that the South African government has made clear commitments to addressing this. With more than 70 countries having convened at the Sixth Open Government Partnership (OGP) Summit at the end of May 2019 to review and renew innovations in open government – it is worth reflecting on South Africa’s commitments (and actions) to tackle corrupt procurement to date.

At the launch of South Africa’s previous OGP National Action Plan, the erstwhile Deputy Minister of Public Service and Administration, Ayanda Dlodlo, committed the government to implement open contracting principles.

This would include, for instance, ensuring that tender bid evaluation meetings are open to scrutiny by any member of the public. While there have been some noteworthy reforms in the country’s procurement landscape, we are deeply concerned by what appears to be some loss in momentum and commitment on this front. The establishment of the Office of the Chief Procurement Officer in 2013 as well the introduction of government’s e-tender portals and central supplier databases in 2015 constitute fundamental strides towards more transparent government systems. However, it is clear that more can – and must – be done.

The accumulating evidence of the state capture project starkly illustrates how procurement processes that should be geared towards enabling service delivery have allowed public representatives and private interests to infiltrate state coffers for personal gain.

For instance, earlier this year it was reported that former Limpopo MEC of Education, Ishmael Kgetjepe had allegedly been paid over R1-million by Mvula Trust for “…constituency work and various political work at the branch level”. Mvula Trust was contracted through the Accelerated School Infrastructure Delivery Initiative (ASIDI) to provide sanitation facilities at schools in Limpopo. It is stated that the funds, which were improperly diverted to MEC Kgetjepe, could have built proper toilets for at least 17 schools in the province.

There is, clearly, an enormous amount at stake. Besides the very obvious benefits of tackling corruption and elite state capture, openness has been shown to improve competitiveness and government efficiency, increase investor confidence as well as value for money. Perhaps of even greater importance is the potential for delivering higher quality services to all members of the public – particularly to those most dependent on public services. There are promising lessons from comparable economies.

In Colombia, for instance, open contracting resulted in savings on school nutrition programmes. The governments of Honduras and Malawi are implementing open contracting for public infrastructure projects – increasing value for money. Increasingly, low to middle-income countries around the world are recognising the value of transparency and are using open data to achieve this.

As a founding member of the OGP, there is no reason that South Africa should not heed the all-too-loud clarion call to open up public contracting to safeguard public resources and deliver on the commitments made to all in the National Development Plan. DM

Hopolang Selebalo works for Equal Education, Zukiswa Kota for the Public Service Accountability Monitor, and Daniel McLaren for Section 27. Imali Yethu is a coalition of civil society organisations working with the South African National Treasury to make budget information more accessible, user-friendly and empowering through the collaborative development of an online budget data portal, www.vulekamali.gov.za

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However, it would be an offensive oversight not to acknowledge that right there on the front lines, alongside whistleblowers and civil society, stand the journalists. Armed with only their determination to inform society and defend the truth, caught in the crossfire of shots fired from both sides.

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