By Rosemary Tjombonde-Kakuuai
Strengthening governance in procurement is crucial for State-Owned Enterprises (SOEs), especially in today’s volatile, uncertain, complex, and ambiguous (VUCA) business environment.
This landscape is shaped by challenges such as geopolitical tensions, leadership instability, and shifting regulatory frameworks, which impact both the public and private sectors.
In essence, procurement is more than just an ad hoc or operational function; it is a strategic lever that can either uphold or undermine the integrity of an organisation.
The intersection of governance and procurement is yet another elephant in the room that many SOEs must address and realise the impact it might have on the execution of organisational goals. Hence, this is precisely where reform must begin.
Procurement in SOEs often involves large-scale contracts, public funds, and high-stakes decision-making. Without robust governance structures, this space becomes fertile ground for corruption, bribery, and unethical practices.
The consequences are far-reaching, leading to inflated costs, substandard service delivery, reputational damage, and erosion of public trust.
Governance, in its essence, is about accountability, transparency, ethical and effective leadership. When applied rigorously to procurement, it ensures that decisions are made in the public interest, that processes are fair and competitive, and that risks are managed proactively.
Unfortunately, many corporate governance failures in SOEs can be traced back to procurement irregularities, whether it is the awarding of contracts to politically connected entities, the manipulation of tender processes, or the lack of oversight in contract execution.
The linkage between governance and procurement is not incidental; it is structural. A recent World Bank assessment report on Namibia’s public procurement system, conducted using the Methodology for Assessing Procurement Systems (MAPS), found significant weaknesses, including limited capacity, poorly defined responsibilities, and a lack of transparency. Procurement policies must be embedded within a broader governance framework that includes:
- Clearly defined roles and responsibilities for procurement officials and oversight bodies.
- Independent audit and compliance mechanisms to detect and deter misconduct.
- Transparent reporting systems that allow stakeholders to monitor procurement activities.
- Ethical codes of conduct that guide behaviour and decision making.
Moreover, board members and executive leadership must recognise procurement as a strategic risk area. Their oversight should go beyond financial metrics to include ethical performance and compliance with procurement laws and regulations.
Recently, we have seen major developments stemming from public procurement scandals, including the Fish Rot fallout, the recent fuel rot fiasco, the Meatco missing cattle dilemma, the Ministry of Health and Social Services’ medical store entanglement, the attempt to direct procurement of the state railway company TransNamib’s locomotive, and the Walvis Bay Municipality’s pothole tender to mention a few.
The need for reforming procurement governance cannot be overstated. It is not merely a technical issue; it is a matter of national development. Every dollar lost to corruption is a dollar stolen from education, healthcare, housing, infrastructure, and the future of our people.
To restore integrity and efficiency in SOEs, governance must be strengthened at the procurement level. This means investing in capacity building, leveraging technology for transparency, and fostering a culture of accountability. Only then can SOEs fulfil their mandate to serve the public good and drive sustainable development.
*Rosemary Tjombonde-Kakuuai holds an MPhil in Corporate Strategy from the Gordon Institute of Business Science (GIBS). She is a Certified Procurement with the Chartered Institute of Procurement & Supply Chain (MCIPS). She is pursuing a Certified Director credential with the Institute of Directors South Africa (IoDSA). She is passionate about Strategy, Corporate Governance, Strategic Procurement and Leadership. The views expressed in this article are entirely her own. Connect with her on LinkedIn.
