The Ministry of Finance and Public Enterprise today launched the Code of Good Practice on Preferences, referred to in Sections 71 and 72 of the Public Procurement Act, with the goal of facilitating easier market access for youth, women, small and medium enterprises , and manufacturers, as well as granting national preference to Namibian suppliers.
The Code of Good Practice, according to Minister of Finance and Public Enterprise Ipumbu Shiimi, aims to achieve granting exclusive preferences to local suppliers as defined in the recently amended Public Procurement Act through the reservation of certain procurement of goods, works, and services.
Preferences are special interventions aimed at empowering certain targeted categories of Namibian suppliers with a view to enhancing their participation in the mainstream economy and achieving specific objectives such as economic inclusivity and the creation of employment.
Shiimi said these preferences will be applied by the Central Procurement Board and Public Entities to the procurement of certain goods, works and services.
“For procurements that are subject to national preference, a margin of up to 10 percent price preference will be given to suppliers meeting the nationality requirements in section 71(3) of the Act and the qualification criteria specified under the Code, for different procurements. In addition, exclusive preference is two-fold,” he said.
According to Shiimi, the nature of procurements in Annexures 2, 3 and 4 of the Code are reserved exclusively for procurement from local,Namibian suppliers who have met the nationality requirements in the act and the local content requirement as determined in the Code.
He further said that by granting these two forms of preferences, Namibian suppliers will be given a competitive advantage that will help build their capacity and greatly enhance their ability to compete against multinational corporations.
The minister also shared that the Code of Good Practice allows for preferential treatment for the procurement of raw meat of cloven-hoofed animals north of the veterinary cordon fence.
“This preferential treatment particularly gives effect to Resolution No. 10 of the Land Conference, 2018, which resolved that there should be special arrangements for the Northern Communal farmers’ produce through the public procurement system,” he explained.
Shiimi urged Namibians to embrace this policy as an effort to boost the empowerment and developmental policies of the Government and warned opportunistic enterprises against attempting to play the system.
“The Code should therefore be viewed as an opportunity to empower local businesses who aspire growth and sustainability required for the industrial and social advancement of Namibia. I warn that the Code of Good Practice should not be seen as a window for trials with opportunistic enterprises, therefore public entities should assume high responsibility at all times and ensure that awards are made to legitimate businesses with credentials to guarantee that the public sector and Namibia, in general, enjoy value for money that it so highly deserves,” he said.
He emphasized that youth should optimize this opportunity as “the youth is an important resource which has the potential to propel our economy onto a competitive and sustainable growth path.”
“The implementation of this policy instrument will also enhance the achievement of Enhancing Productivity of Priority Economic Sectors of Economic Advancement of the Harambee Prosperity Plan II. Therefore, it is imperative that Government makes deliberate efforts such as the granting of preferential treatment in the public procurement system to create opportunities for the youth as well as other targeted categories of Namibian suppliers through the issuance of the Code of Good Practice on Preferences,” he added.
This comes as public procurement is increasingly recognized as a strategic function that plays a key role in using public funds for sustainable development outcomes and fostering economic growth, job creation, and social welfare.
The Government as one of the largest single buyers of goods and services in the country, often with expenditure estimated at 20 to 30 percent of the GDP, is mandated to promote, facilitate and strengthen measures, such as the “code of Good Practice” to implement the empowerment and Industrialisation policies of the Government, said Shiimi.
“Based on this economic reality, the Government of Namibia resolved to use a portion of its expenditure in redressing socio-economic imbalances through the granting of preferential treatment or preferences in the public procurement system.
Although, preferences are an exception to the competitive supply principle in that public entities do not exclusively buy from the cheapest bidder, they have to be applied in an equitable manner without compromising the transparency and value for money principles,” he explained.