The Central Procurement Board of Namibia (CPBN) says it will investigate the viability of direct procurement in Namibia, its overall benefits and challenges.
CPBN Acting CEO Amon Ngavetene said while direct procurement, which involves bypassing intermediaries to work directly with manufacturers, may seem advantageous, its practicality in the Namibian context is not yet clear.
“For services such as security, cleaning and construction, we already engage end-to-end contractors without intermediaries. However, for goods, especially in sectors like pharmaceuticals, direct procurement by large manufacturers is less common due to our market size and distribution complexities,” Ngavetene told The Brief.
He said Namibia’s market size often deters large manufacturers from dealing directly with end-users or governmental bodies.
“Manufacturers typically prefer to use distributors or agents, which complicates the potential for direct procurement,” Ngavetene noted.
This intermediary reliance ensures the distribution network is efficient but raises questions about cost-effectiveness and competitive pricing.
Ngavetene acknowledged that while removing intermediaries might appear to reduce costs, the highly competitive procurement market already exerts downward pressure on prices.
“The competitive nature of our procurement process means that cutting out intermediaries does not necessarily lead to lower costs. Prices are kept in check due to the high competition among suppliers,” he explained.
The feasibility of manufacturers working directly with entities like the Ministry of Health was also addressed.
“We need academic research to explore whether it is possible for manufacturers to engage directly with our governmental bodies. This would help determine if direct procurement could be a viable option for Namibia’s unique market dynamics,” said Ngavetene.
Meanwhile, the CEO noted that non-compliance with procurement regulations remains a significant issue across various public sectors, including local authorities.
“Many public entities are not adhering to the procurement act, which leads to legal and operational consequences, such non-compliance can invalidate contracts and disrupt procurement processes,” Ngavetene stated.
To mitigate these issues, Ngavetene stressed the importance of robust consequence management and enhanced policy enforcement.
“The current lack of enforcement is problematic. We need to enhance the capacity of our policy unit to monitor compliance and enforce consequences effectively. Improved enforcement would deter non-compliance and ensure adherence to procurement laws,” he said.
Despite the challenges, Ngavetene believes that addressing non-compliance in a few entities could set a positive precedent.
“If we address non-compliance decisively in one or two entities, it could promote adherence to procurement regulations across the board,” he said.
